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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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