Output in a certain factory is given by the Cobb-Douglas production function

where K is the capital in $1,000 and L is the size of the labor force, measured in worker-hours.

a. Use your calculator to obtain Q(K, L) for the values of K and L in this table:

b. Note that the output Q(277, 743) is doubled when K is doubled from 277 to 554 and L is doubled from 743 to 1,486. In a similar manner, verify that output is tripled when K and L are both tripled, and that output is halved when K and L are both halved. What do you think happens if K is doubled and L is halved? Verify your response with your calculator.

Transcribed Image Text:

Q(K, L) = 57K¹/4L3/4