FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider an economy with the following Cobb-Douglas production function: Y = K 1/3 L 2/3 . The economy has 1,000 units of capital and a

Consider an economy with the following Cobb-Douglas production function:

Y=K1/3L2/3.

The economy has 1,000 units of capital and a labour force of 1,000 workers.

  1. Derive the equation describing labour demand in this economy as a function of the real wage and the capital stock.
  2. If the real wage can adjust to equilibrate labour supply and labour demand, what is the real wage? In this equilibrium, what are employment, output, and the total amount earned by workers?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The American Economy

The American Economy

Authors: Walter Greason, William Gorman

1st Edition

1524902675, 9781524902674

More Books

Students also viewed these Economics questions

Question

★★★★★
You're given the following demand and supply tables: a. Draw the market demand and market supply curves. b. What is excess supply/demand at price $30? Price $60? c. Label equilibrium price and...

Answered: 1 week ago

Question

★★★★★
=+If you are not familiar with Priceline.com Inc., go to its Web site. Assume that an individual bids $60 on Priceline.com for a room in Dallas, Texas, on August 24. Assume that August 24 is a...

Answered: 1 week ago

Question

★★★★★
=+c) Whether the decision you made to out-source manufacturing last year turned out to be the cost-saver you thought it would be. Section 23.2

Answered: 1 week ago

Question

★★★★★
The absorber plate and the adjoining cover plate of a flat-plate solar collector are at 70 and 35C, respectively, and are separated by an air space of 0.05 m. What is the rate of free convection heat...

Answered: 1 week ago

Question

★★★★★
A Portfolio Management System generates a set of Orders throughout the day that need - to - be traded on a - market. An Order - needs to - be traded within 1 0 - minutes. Each trade has an -...

Answered: 1 week ago

Question

★★★★★
What are the importance of calculus in business and economics?

Answered: 1 week ago

Question

★★★★★
Be sure to follow the seven step paradigm when submitting this as a collected homework problem: 1. I want to and I can 2. Draw a diagram (if you can't visualize this in a diagram, see the next page)...

Answered: 1 week ago

Question

★★★★★
Directions: Perform an ethical penetration test on a website of your choice using one of the following tools. As an option, you can use Kali Linux through Oracle Virtual Box. Nmap:...

Answered: 1 week ago

Question

★★★★★
The Casual Furniture Company manufactures outdoor furniture and incurred the following costs during the month of January: $ Timber 31,998 Wages-assembly line personnel 19,499 Wages-factory supervisor...

Answered: 1 week ago

Question

★★★★★
A drug trial is attempted using a real drug and a pill made of just sugar. 18 people are given the real drug in hopes of increasing the calcium levels. The increase in calcium level is found to be on...

Answered: 1 week ago

Question

★★★★★
1. Using the TQM philosophy show how Disney or any other company can benefit from implementing lean method so that customers can experience their value for money. 2. Provide recommendations on how...

Answered: 1 week ago

Question

★★★★★
3.46 A conference began at noon with two parallel sessions. The session on portfolio management was attended by 40% of the delegates, while the session on chartism was attended by 50%. The evening...

Answered: 1 week ago

Question

★★★★★
3.43 In Sipadan, Malaysia, there is a national park where up to 100 dolphins can be found. Suppose we randomly select two of them in one draw. a. What is the probability that we pick two females,...

Answered: 1 week ago

Question

★★★★★
3.44 An analyst is presented with lists of 4 stocks and 5 bonds. He is asked to predict, in order, the 2 stocks that will yield the highest return over the next year and the 2 bonds that will have...

Answered: 1 week ago

Previous Question Next Question