An economy has a Cobb-Douglas production function: Y = AK* L(1-a). A is the technology level, Kis capital; L is labor; and Y is income. In 20X1, the technology level A is 139, capital K = 245, labor L = 458, income Y = 8,155 In 20X2, the technology level A is 144.96, capital K = 259.26, labor L = 474.12, income Y = 8,945.71 In 20X3, the technology level A is 152.02, capital K = 273.31, labor L = 489.20 Question 1.6: Elasticity of income with respect to labor What is the elasticity of income with respect to labor? A. 18% B. 20% C. 22% D 24%

An economy has a Cobb-Douglas production function: Y = AK* L(1-a). A is the technology level, Kis capital; L is labor; and Y is income. In 20X1, the technology level A is 139, capital K = 245, labor L = 458, income Y = 8,155 In 20X2, the technology level A is 144.96, capital K = 259.26, labor L = 474.12, income Y = 8,945.71 In 20X3, the technology level A is 152.02, capital K = 273.31, labor L = 489.20 Question 1.6: Elasticity of income with respect to labor What is the elasticity of income with respect to labor? A. 18% B. 20% C. 22% D 24%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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