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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

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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