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) Consider the Cobb-Douglas production function: Y = AK1L, where K and L are the capital stock and labor uses respectively. Consider that the economy
) Consider the Cobb-Douglas production function: Y = AK1L, where K and L are the capital stock and labor uses respectively. Consider that the economy is composed of a "representative" firm that maximizes profits by hiring L workers and paying them some real wage w, for a total wage bill of wL, by renting capital K at a rate r, paying the total rental costs rK
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