Calculate the labor and capital share of output: Y=ALαK1-α A= 1.5 α= 0.5 L=Labor K= Capital Factor Markets: Labor Supply (L^S)= 100 Labor Demand (L^D)= 200-5(W/P) Supply of Capital (K^S) = 100 Demand for Capital (K^D)= 200-4(R/P) (W/P)= real wage rate (R/P)= real rental rate
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Calculate the labor and capital share of output:
Y=ALαK1-α
A= 1.5
α= 0.5
L=Labor
K= Capital
Factor Markets:
- Labor Supply (L^S)= 100
- Labor
Demand (L^D)= 200-5(W/P) - Supply of Capital (K^S) = 100
- Demand for Capital (K^D)= 200-4(R/P)
(W/P)= real wage rate
(R/P)= real rental rate
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