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A representative household has utility function U (C) = In C. It supplies labor services at the hourly wage w, and owns all the shares

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A representative household has utility function U (C) = In C. It supplies labor services at the hourly wage w, and owns all the shares of the representative firm, as such it receives all firm's profits . The representative firm has a decreasing return to scale (DRS) production function, that is Y = zHo, with 0

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