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Questions › IIT JAM › IIT JAM 2024 › Q22
2 marks, −0.667Microeconomics › Factor markets and income distribution › Distribution theory: factor shares, Euler's theorem and rentEasyabout 1 min

IIT JAM 2024 Question 22: Factor markets and income distribution

Consider Y=50K0.4L0.6Y = 50 K^{0.4} L^{0.6}Y=50K0.4L0.6, where YYY is output, KKK is capital, and LLL is labour. Assuming perfect competition in the product and factor markets, the share of total income paid to labour is equal to

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Consider Y = 50 K⁰·⁴ L⁰·⁶, where Y is output, K is capital, and L is labour. Assuming perfect competition in the product and factor markets, the share of total income paid to labour is equal to (A) 0.2 (B) 0.3 (C) 0.4 (D) 0.6

Also written as: Consider Y = 50 K^(0.4) L^(0.6), where Y is output, K is capital, and L is labour. Assuming perfect competition in the product and factor markets, the share of total income paid to labour is equal to

Factor markets and income distribution has come up 55 times in 6 exams since 2006.

What this question tests

This question is on Distribution theory: factor shares, Euler's theorem and rent, part of Factor markets and income distribution in Microeconomics.

How output is divided among factors, and when payments to factors exactly exhaust output.

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