Answer to Question #257492 in Economics for Akhona Klanisi

Question #257492

1.

(Capital and the Labour Market, Question with Mathematical) derivations). Consider our 4- quadrant model (for 1 sector only), take everything as standard there, but with the following particular specification : the production function is given by


Y=AKaL1-a, with 0 ≤a≤1


a.      Show graphically the equilibrium in the labour market, taking A, K as fixed and given.

b.     Write down the key equation behind each quadrant.

c. Suppose an interest rate change has the following two effects: K goes down (less capital is used in production and the MPL in quadrant- I still takes this now-lower quantity of K as given) and β goes down. What happens to the equilibrium in the labour market, compared to (a)? (Illustrate graphically, if there any shift on the curve please explain). 







1
Expert's answer
2021-10-31T18:05:09-0400
Dear Akhona Klanisi, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog