The supply side of the economy is defined by: Y = 8L1/4K 3/4 L = 625 K = 625 The demand side of the economy is defined by: C = 400 + 0.8(Y-T) I = 900 – 1250r G = 1000 T = 1500 a. Using the production function, calculate the supply of output. b. Calculate the real rental rate of capital. What is the capital owners' share of income in this economy?

The supply side of the economy is defined by: Y = 8L1/4K 3/4 L = 625 K = 625 The demand side of the economy is defined by: C = 400 + 0.8(Y-T) I = 900 – 1250r G = 1000 T = 1500 a. Using the production function, calculate the supply of output. b. Calculate the real rental rate of capital. What is the capital owners' share of income in this economy?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section18.4: The Other Factors Of Production: Land And Capital

Problem 4QQ

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