Farmland is a developing country with the following production function: Y = 24L2/3K1/3 with Y = Output level L = Quantity of labor K = Quantity of machines a. Find the real rate of return for labor. Show your calculation. b. Suppose Farmland is granted some extra machines for production. How would this affect the real rate of return for labor? Explain by using the result in (a).

Farmland is a developing country with the following production function: Y = 24L2/3K1/3 with Y = Output level L = Quantity of labor K = Quantity of machines a. Find the real rate of return for labor. Show your calculation. b. Suppose Farmland is granted some extra machines for production. How would this affect the real rate of return for labor? Explain by using the result in (a).

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter16: Economic Growth

Section: Chapter Questions

Problem 15E

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