Suppose an Economy Has an Increase in Labor Input of 60

question 2

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 = AK0.3L0.7.)

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Definitions:

Decertify

The process of revoking or removing the official recognition or certification of a role, organization, or activity, often related to unions.

Bargain

The act of negotiating terms between two parties, such as between employers and employees over wages and working conditions.

Union Certification

The official recognition by a government agency that a trade union represents the majority of workers in a bargaining unit, allowing it to negotiate on their behalf.

Labour Agreement

A formal agreement between employers and employees (often through unions) outlining terms of employment, wages, and conditions.