Assume that the Cobb-Douglas production function is given by Y= 20K/32/3. Assume also that capital is...

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Assume that the Cobb-Douglas production function is given by Y= 20K¹/32/3. Assume also that capital is 300, labor is 500. a. Suppose all capital and labor are fully employed, how much is output? Show your calculation. b. Is the given production function constant returns to scale? If the quantity of capital and the quantity of labor both double, what will happen to output? c. What fractions of income do capital and labor receive? d. What is total labor income? What is total capital income? What is economic profit? e. What is equilibrium real wage? What is equilibrium real rental price of capital? Are total income and total output equal? f. Suppose immigration largely increases the nation's population. What will happen to output? g. According to the labor market model, which curve will shift with immigration, the labor supply or the labor demand curve? To the left or to the right? As a result, what will happen to real wage? h. According to the capital market model, which curve will shift with immigration, the capital supply or the capital demand curve? To the left or to the right? As a result, what will happen to real rental price of capital? i. After the wave of immigration, what fractions of income do capital and labor receive? Assume that the Cobb-Douglas production function is given by Y= 20K¹/32/3. Assume also that capital is 300, labor is 500. a. Suppose all capital and labor are fully employed, how much is output? Show your calculation. b. Is the given production function constant returns to scale? If the quantity of capital and the quantity of labor both double, what will happen to output? c. What fractions of income do capital and labor receive? d. What is total labor income? What is total capital income? What is economic profit? e. What is equilibrium real wage? What is equilibrium real rental price of capital? Are total income and total output equal? f. Suppose immigration largely increases the nation's population. What will happen to output? g. According to the labor market model, which curve will shift with immigration, the labor supply or the labor demand curve? To the left or to the right? As a result, what will happen to real wage? h. According to the capital market model, which curve will shift with immigration, the capital supply or the capital demand curve? To the left or to the right? As a result, what will happen to real rental price of capital? i. After the wave of immigration, what fractions of income do capital and labor receive?

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a To find the output Y substitute the given values of capital K and labor L into the CobbDouglas pro... View the full answer