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Hi..
Can anyone confirm the ans to ques 4 B of isi 2008 me 2..
Consider an economy producing a single good accd to the prod function y= min[k,l].Suppose economy is endowed with 100 units of capital and has a labour supply function ls=50 w.Assuming all markets to be competitive,calculate the rental rates for labour and cpiatl..
i am getting w(real wage)= 2 and rc(real rate)= 1.
Please confirm..
Also for 10 B ,is the ans that he continues to neither borrow or lend?
Thanks
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