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Suppose that the production function for the economy is

Calculating the Marginal Product of Labor and the Marginal Product of Capital

Suppose that the production function for the economy is: Assume that real GDP is $12,000 billion, the capital stock is $40,000 billion, and the labor supply is 200 billion hours.

Y = AK1/2L1/2.

a. Calculate the value of the marginal product of capital. Given this value, if the capital stock increases by $1 billion, by how much will real GDP increase?

b. Calculate the value for the marginal product of labor. Given this value, if the labor supply increases by one hour, by how much will real GDP increase?

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Macroeconomics: Suppose that the production function for the economy is

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Macroeconomics: Suppose that the production function for the economy is

Reference No:- TGS0660373

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