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Suppose that an economy's production function is Cobb-Douglas with parameter α = 0.3. a. Capital and labor receive shares of income of and respectively.b. Suppose immigration increases the labor force by 10 percent.(i) Total output will (ii) The rental price of capital will (iii) The real wage will c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent.(i) Total output will (ii) The rental price of capital will (iii) The real wage will

Cobb-Douglas production function During the 1920 s, Charles Cobb and Paul Douglas modeled total production output P (of a firm, industry, or entire economy) as a function of labor hours involved x and capital invested y (which includes the monetary worth of all buildings and equipment). The Cobb-Douglas production function is given by P(x, y)=k x^α y^1-α where k and αare constants representative of a particular firm or economy. a. Show that a doubling of both labor and capital results in a dou