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Business, 20.02.2020 02:05 Kklove8987
Assume that a competitive economy can be described by a constant-returns-to-scale Cobb Douglas production function Y= K"La-a. All factors of production are fully employed. Holding other factors constant, including the quantity of labor and technology, carefully explain how a one-time, 50-percent decrease in the quantity of capital (perhaps the result of war damage) will change each of the following: a. the level of output produced; b. the real wage of labor, c. the real rental price of capital d. capital's share of total income
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Assume that a competitive economy can be described by a constant-returns-to-scale Cobb Douglas produ...
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