What is the labor share and capital share of output

Assignment Help Econometrics
Reference no: EM13208528

Consider the following technology F(K,L) = (AK^?)(L^(1??)) where K is the level of capital, L is the level of labor or hours worked, A is a efficiency parameter and ?  (0, 1)

(a) Write down the firms problem in the long-run. Note the price for capital and labor are respectively, r and w. (Normalize the price of output to be 1 so that w and r are in real terms).

(b) Does this production function depict constant return to scale? Prove it.

(c) What are the marginal productivities of capital and labor? Are they decreasing in each factor?

(d) What is the labor share and capital share of output?

Reference no: EM13208528

Questions Cloud

How to find the reservation wage : Consider an agent who lives two periods. He is unemployed at the beginning of the first period and has a wage offer of w. If he accepts the wage offer w, he will work forever at that wage. If he rejects the offer, he receives an unemployment benef..
Explain what is the ph at equivilance point : What is the pH at equivilance point? c. What is the pH of the solution when 106.4mL of 1.721 M NaOH has been added to the 0.591 M acetic acid solution?
How can persistently weak currencies be stabilized : Discuss the topic: "How can persistently weak currencies be stabilized?"Many countries suffer from chronical economic problems, such as high inflation, high unemployment, and large trade and budget deficits.
Explain how would prepare chloro-methyloctane : How would you prepare 2-chloro-2-methyloctane in a lab begining with 2-methyl-2-octene and hydrochloric acid? It is reacted over heat with Ch2Cl2.
What is the labor share and capital share of output : Write down the firms problem in the long-run. Note the price for capital and labor are respectively, r and w. (Normalize the price of output to be 1 so that w and r are in real terms). (b) Does this production function depict constant return to sca..
Explain how do you find the concentraton of an isotope : how do you find the concentraton of an isotope from its molarity and molecular weight with no other factors
Explain is the multiplier smaller or larger : Solve for equilibrium output. Illustrate the equilibrium in the ISLM diagram. What is the value of the multiplier Now let investment depend on both sales and the interest rate: I=b0+b1Y-b2i b. Solve for the equilibrium output (assume c1+b1
Prepare a draft report to the board of directors : Prepare a draft report to the board of directors which identifies and briefly explains and four main factors to be considered when deciding on the appropriate mix of short, medium or long-term debt finance for Source Ltd.
How might balance of political power influence state loss : The annual growth rate for the population in the state of West Virginia is one of the nation's lowest at 0.30%. Why do you think other states, for example, Virginia, have nearly four times this growth rate

Reviews

Write a Review

 

Econometrics Questions & Answers

  Would george be just as well off consuming 200r and 400b

the per-unit prices of broccoli (B) and pork rinds (R) equal to $2 and $1 respectively, a consumer George, with an income of $1,000 purchases 400R and 300B. At that point, the consumer's MRSBR = 2R/1B. Does this mean that George would be just as w..

  What is the amount of economic investment

Assume that a national restaurant firm called BBQ builds 20 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $300,000 of equipment and furnishings

  Determine the depreciation for the year

The diesel-powered generator with a cost of $60,000 is expected to have a useful operating life of 50,000 hours. The expected salvage value of the generator is $8,000. In its first year, the generator was operated for 5,000 hours.

  Where to use the the midpoint formula

Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $30 per basketball and $600 when the price is set at $20 per basketball. Without using the midpoint formula, can you tell whether demand is e..

  Which brand has the highest brand equity

Assume that Aquafresh own price elasticity is -1.5 and that the Colgate cross price elasticity of demand with respect to Aquafresh price change is 1. How do you interpret the own and cross price elasticities? Which brand is Aquafresh mainly competi..

  What is the equilibrium price in the row market

i) If there is no trade in this market between the US and the rest of the world, what is the equilibrium price in the US market (ii) If there is no trade in this market between the US and the rest of the world, what is the equilibrium price in the ..

  Determine the possibility of declining average costs

Give a numerical example to show that a monopolist's marginal revenue can be upward sloping over part of its range. Hint: The price on the demand curve is the producer's average revenue. Think of a graphic that shows the possibility of declining a..

  Find the best response function for each firm

Consider the short-run situation of a market with three identical firms producing homogeneous outputs. Each firm's total cost function is C(q) = (1/2)q2, where q 0 is a possible output. Market demand is given by Q(p) = 2-2P a. Find the best respon..

  Find a function for an indifference curve

1. For the each of the following functions: 1) find a function for an indifference curve that delivers u=u? units of total utility: 2) Calculate the derivative (dy/dx) of the function (i.e. the instantaneous rate of change). Find the total differe..

  What is the optimal pure bundling price

Microsoft sells three different programs in their office suite: Word, Excel and PowerPoint. Each has a marginal cost of $15. There are three types of con- sumers, writers, accountants and professor, who have the following values for the three diff..

  How much money will you accumulate for an interest rate

One of life's great lessons is to start early and save all the money you can! If you save two dollars today and two dollars each and every day thereafter until you are 60 years old, how much money will you accumulate

  What rate of nominal wage growth will workers seek

Assume that workers, employers and investors all believed that inflation in the coming year would equal the annualized rate of inflation experienced in the past 6 months. Also assume that workers had been receiving nominal wage gains of 5% during ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd