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{"ops":[{"insert":"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\n\nY= AK"},{"attributes":{"script":"super"},"insert":"a"},{"insert":"L"},{"attributes":{"script":"super"},"insert":"1-a"},{"insert":"\u00a0, with 0 \u2264a\u22641\n\nd.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Forget anything you have been told about the shape of the MPL as a function of L in class. Suppose in this sector, capital can be rented freely at "},{"attributes":{"bold":true},"insert":"r "},{"insert":"such that MPK= "},{"attributes":{"bold":true},"insert":"r "},{"insert":". What does the four- quadrant equilibrium look like in this case? (It\u2019s still the case that p1= MPL, and the MPL is a function of A, K, L).\n\n\n\n"}]}
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