Suppose that Indonesia's national production function is Y = K 05L 05, where Kis the amount of land and Lis the amount of labor. The economy starts when the amount of land owned is 100 units and the number of workers is 100 units. Calculate the following indicators. a. How much output is produced? b. What are the labor wages and land rent? c. What is the share of the output received by labor?
Suppose that Indonesia's national production function is Y = K 05L 05, where Kis the amount of land and Lis the amount of labor. The economy starts when the amount of land owned is 100 units and the number of workers is 100 units. Calculate the following indicators. a. How much output is produced? b. What are the labor wages and land rent? c. What is the share of the output received by labor?
Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions
Section: Chapter Questions
Problem 6WNG
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![Suppose that Indonesia's national production function is Y = K 05L 05, where K is the
amount of land and Lis the amount of labor. The economy starts when the amount of
land owned is 100 units and the number of workers is 100 units. Calculate the following
indicators.
a. How much output is produced?
b. What are the labor wages and land rent?
c. What is the share of the output received by labor?
d. If a natural disaster occurs that causes the population to be reduced by half, what is
the new level of national output?
e. What are the new rates of labor wages and land rent?
f. What share of output does the labor receive now?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7b8dff4b-6c47-4143-8d85-ed1aa92ccfa9%2F5706b7bd-caee-44be-8e59-0208f2e67cff%2Ffm3fqsb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that Indonesia's national production function is Y = K 05L 05, where K is the
amount of land and Lis the amount of labor. The economy starts when the amount of
land owned is 100 units and the number of workers is 100 units. Calculate the following
indicators.
a. How much output is produced?
b. What are the labor wages and land rent?
c. What is the share of the output received by labor?
d. If a natural disaster occurs that causes the population to be reduced by half, what is
the new level of national output?
e. What are the new rates of labor wages and land rent?
f. What share of output does the labor receive now?
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