Re: ISI INTERVIEW PREP

Posted by deepak on Jun 30, 2012; 7:33am
URL: http://discussion-forum.276.s1.nabble.com/ISI-INTERVIEW-PREP-tp7578819p7578840.html

Since a production function is given, we could perhaps calculate the labor demand from this equation (MPL = real wage). This would have to be equal to the labor supply determined in part 1. Substitute this back into the production function and we should find equilibrium output Y. BUt I'm not sure how Investment will figure in this equation, as this is more of a supply side equation :/ . And I think theta determines the Labor share of income?