The Homework Question is only part B;Alwyn Young has a recent paper in which he studies the macroeconomic consequences of the horrible tragedy of AIDS in sub-Saharan Africa. Answer the following questions, motivated by his research.;(a) In the production function approach we studied in class, we noted that the wage rate is equal to the marginal product of labor. Write the mathematical expression of this statement. That is, write the wage as a function of capital labor, and the TFP parameter. Assume that the production function is CRS and labor share of output is 1/3.;(b) Young estimates that AIDS may eventually kill 25% of the population in some of the poorest countries of the world. Assuming TFP and the amount of capital are unchanged by the epidemic, by how much would the wage rate change as a consequence of AIDS.
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