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Assume That the Production Function Is Given by Y = YY

question 71

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Assume that the production function is given by Y = AK0.5L0.5, where Y is GDP, K is capital stock, and L is labor. The parameter A is equal to 10. Assume also that capital is 100, labor is 400, and both capital and labor are paid for their marginal products. a. What is YY ?
b. What is the real wage of labor?
c. What is the real rental price of capital (the amount of output paid per unit of capital)?


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The potential for environmental damage or degradation resulting from a project or activity, impacting ecosystems, biodiversity, or human health.

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