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Suppose capital's share in output is 0.3 and labor's share is 0.7: A. What would be...

Suppose capital's share in output is 0.3 and labor's share is 0.7:

A. What would be the effect on output if the capital stock increases by 10 percent (assuming labor is constant)?

B. What would be the effect of increasing labor by 10 percent (assuming capital is constant)?

C. If the increase in labor in part B is due to population growth of 10%, what would happen to per capita output?

D. What would be the effect on per capita output in part B if the increase in labor were due to an increase in the labor force participation rate (say women enter the labor force) with the population constant?

E. Suppose output is rising 4% per year. If capital grew by 3% and labor grew by 1%, what would the growth rate of multifactor productivity be? What would be the growth in labor productivity? F. Suppose output is rising 3% per year. If both labor and capital grow by 1 percent each, what would the growth rate of multifactor productivity be? What would be the growth in labor productivity?

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