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Suppose That the Production Function for the Economy Is Y

Question 26

Multiple Choice

Suppose that the production function for the economy is Y = AK⁰.⁵ᴸ⁰.⁵.If the capital stock = 40 000,the quantity of labour = 10 000,and the efficiency index = 3,the equilibrium real rental price of capital is


A) $0.33.
B) $0.75.
C) $1.00.
D) $2.22.

Correct Answer:

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