Suppose the payments to capital and labor are (w*L*)/Y* = 2/3 and (r*L*)/Y* = 1/3,respectively.One implication of this result is:
A)(w*L*/r*K*)= Y*.
B)w*L* - r*K* = Y*.
C)w*L* $\times$ r*K* = Y*.
D)w*L* + r*K* = Y*.
E)(w*L*/Y*)(r*K*/Y*)= 0.

Question

Quizplus · Accepted Answer

The payments to capital and labor sum up to the total output Y*, so w*L* + r*K* = Y*.

Suppose the Payments to Capital and Labor Are (W*L*)/Y* = ×\times×

Suppose the Payments to Capital and Labor Are (WL)/Y* = $\times$