Suppose an Economy Has an Increase in Labor Input of 60

question 64

Essay

Suppose an economy has an increase in labor input of 60 percent,while output has increased by 100 percent.Assuming no change in total factor productivity,calculate the percentage increase in the capital input.(Use the Cobb-Douglas production function Y = A . )

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Definitions:

Economy

Social arrangements that organize the production, distribution, and consumption of goods.

Monolithic Bias

The tendency to view a diverse group as more homogenous and uniform than it actually is.

Overcome

To successfully deal with or gain control of something difficult.

Security Interest

A legal right or claim on assets granted to a creditor to secure the repayment of a loan, ensuring the asset's availability for seizure in case of default.