Using the model for a closed economy, if the nominal wage is $40 and we have a Cobb-Douglas production function where a = 0.2, L = 400, and labor income + capital income = $2,000, what is the price of the output given the neoclassical theory of distribution holds?

Using the model for a closed economy, if the nominal wage is $40 and we have a Cobb-Douglas production function where a = 0.2, L = 400, and labor income + capital income = $2,000, what is the price of the output given the neoclassical theory of distribution holds?

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics

Section: Chapter Questions

Problem 1CQ

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b)
have a Cobb-Douglas production function where a = 0.2, L = 400, and labor income
+ capital income = $2,000, what is the price of the output given the neoclassical
theory of distribution holds?
Using the model for a closed economy, if the nominal wage is $40 and we
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