Homework Answers
Find the MPL = derivative of Y with respect to L
MPL = A*(1-a)K^aL^(-a)
Now at the given values MPL = 2.01
Hence, wage rate is 2.01
Also, from another perspective we have
Find Y = 2 * (1000)^(0.4) * (100)^(1 – 0.4)
= 502.38
Hence the wage rate is MPL = a(Y/L)
= 0.4*(502.38/100)
= 2.01.
Thus wage rate is 2.01
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