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Question: suppose iphones are produced using three input factors combined in...

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Suppose iPhones are produced using three input factors combined in a Cobb-Douglas production function

3. Now assume a + c = 1, and b = 0 (ie, no unskilled labour is used in production). Derive the relative factor demand fuction)) under the standard Heckscher-Ohlin assumptions where K/L is a function of w/r and a. 4. Define the cost share of each factor (share of the total cost of each factor) as cK-u LKR and cL = wLnLR. Using the assumption and your result from 3., show that these cost shares are a function of a. Are they also a function of relative factor prices?

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