The Cobb-Douglas production function has the form Y = AKL1 . That is, total output (Y) is a function of labor employed (L), capital employed (K), and the level of technology (A).

Assume that = 0.3. Use this information to answer the following questions.

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c. This means that labor receives . of total income, and capital receives - of total 30 percent 30 percent income. 70 percent 70 percent (1. Suppose that immigration increases the labour force by 10 percent. As a result, total output will . , the rental price of capital will v , and the real wage will decrease by 2.8 percent decrease by 4.1 percent decrease by 4.1 percent ' decrease by 2.8 percent increase by 6.9 percent increase by 6.9 percent increase by 9.8 percent increase by 9.8 percent In a competitive economy, rms pay a real wage (W/P) equal to the marginal product of labor (MPL) and a real rental rate (R/P) equal to the marginal product of capital (MPK). Note that labor's share of total income (Y) in the economy is represented by the product of the real wage and the total quantity of labor employed. Likewise, capital's share is represented by the product of the real rental rate and the total quantity of capital employed. Use this information to answer the following questions. h. Labor's share of total income (Y) in the economy can be expressed as v , and capital's share of total (1 a)Y income can be expressed as v . Y (1 - or); [IY r a? d. Suppose that immigration increases the labour force by 10 percent. As a result, total output will , the rental price of capital will - , and the real wage will ' v Incorrect Incorrect [ '1- increase by 9.8 percent increase by 6.9 percent decrease by 2.8 percent decrease by 4.1 percent