In a certain country, output is produced using only labor and land. The production function is Y=AXªL1-a where Y is output, X is the quantity of land, and Lis the quantity of labor. Factors of production are paid their marginal products. In this country there are 100 acres of land and 30 workers. Land earns a rent of $4,000 per acre per year. Workers are paid a wage of $10 per hour, and work 2,000 hours per year. What is the value of a?
In a certain country, output is produced using only labor and land. The production function is Y=AXªL1-a where Y is output, X is the quantity of land, and Lis the quantity of labor. Factors of production are paid their marginal products. In this country there are 100 acres of land and 30 workers. Land earns a rent of $4,000 per acre per year. Workers are paid a wage of $10 per hour, and work 2,000 hours per year. What is the value of a?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
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