Question: 1. Suppose the production function is given by: Y = ALKF Profits are defined as P-Y-W-L RK-K, where P is the output price, W is

1. Suppose the production function is given by: Y = ALKF Profits are defined as P-Y-W-L RK-K, where P is the output price, W is the nominal wage rate, and R is the rental rate of capital. a. (5 points) Find the formulas for marginal product of labor and marginal product of capital. b. (5 points) Assume the amount of capital (K) is fixed. Solve for the optimal labor demand, given the real (W/P), total factor productivity, and the quantity of capital. dLd @ c. (5 points) Find the elasticity of labor demand or m X =7 P

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