Suppose that the production function is Cobb-Douglas. That is, the production function is . Further, assume that the parameter α = 0.3. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percentage change)? The real rental price of capital (in percentage change)? The real wage (in percentage change)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Suppose that the production function is Cobb-Douglas. That is, the production function is . Further, assume that the parameter α = 0.3. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percentage change)? The real rental price of capital (in percentage change)? The real wage (in percentage change)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.14P

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Suppose that the production function is given by Y=AK0.4N0.6. What is the percentage change in output if both capital and labor rise by 42%? Write the answer in percent terms with up to two decimals (e.g., 10.22 for 10.22%, or 2.33 for 2.33%).
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Please no written by hand and no image Suppose that the production function is given by Y=AK0.4N0.6. What is the percentage change in output if both capital and labor rise by 42%? Write the answer in percent terms with up to two decimals (e.g., 10.22 for 10.22%, or 2.33 for 2.33%).
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