Suppose a production function is given as Y = AKaL(1-a) For values of A=1 K=100 and L
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Question:
Suppose a production function is given as
Y = AKaL(1-a)
For values of A=1 K=100 and L twice as K .
The share of capital for this economy a= 0.5. Suppose the share of capital rises to 0.75 , compute the two different values for Marginal product of labor for this economy(HINT: for MPL takederivative of Y with respect of L , andcompute MPL for both values of a)
- A.0.45 , 0.25
- B.0.25 , 0.125
- C.0.125, 0.5
- D.0.15 , 0.5
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