The production function is Q = ALa Kb, where a > 0 and b > 0. a.

Question:

The production function is Q = ALa Kb, where a > 0 and b > 0.

a. The marginal product of labor is MPL = __________________ .

b. The marginal product of capital is MPK = __________________ .

c. The marginal rate of technical substitution is MRTS = __________________ .

d. Show that the isoquants for this production function are convex.

e. Derive the equation for the long-run expansion path.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial Economics Foundations of Business Analysis and Strategy

ISBN: 978-0078021718

11th edition

Authors: Christopher Thomas, S. Charles Maurice

See More Books

Question Posted: Nov 18, 2014 04:21 AM

See More Questions

A firm's production function is Q = min(K , 2L), where Q is the number of units of output produced using K units of capital and L units of labor. The factor prices are w = 4 (for labor) and r = 1...
A plant's production function is Q = 2KL + K . For this production function, MPK = 2L + 1 and MPL = 2K. The price of labor services w is $4 and of capital services r is $5 per unit. a) In the short...
A manufacturing firm's production function is Q = KL + K + L. For this production function, MPL = K + 1 and MPK = L + 1. Suppose that the price r of capital services is equal to 1, and let w denote...
Ames Manufacturing Plant produces two different replacement parts for dishwashers. During a normal shift, they have 7 hours of time available on their main fabrication machine. The machine will...
Understand the four kinds of results.
Figure shows an arrangement in which four disks are suspended by cords. The longer, top cord loops over a frictionless pulley and pulls with a force of magnitude 98 N on the wall to which it is...
Give three specialized subclasses for the Student class.
At Western University the historical mean of scholarship examination scores for fresh-man applications is 900. A historical population standard deviation = 180 is assumed known. Each year, the...
Windsor Corporation wants to raise $1,210,000 via a rights offering. The company currently has 220,000 shares of common stock outstanding that sells for $32 per share. The issue will allow current...
Bill rides the subway at a cost of 75 cents per trip, but would switch if the price were any higher. His only alternative is a bus that takes five minutes longer, but costs only 50 cents. He makes 10...
Ross Perot added his memorable insight to the debate over the North American Free Trade Agreement (NAFTA) when he warned that passage of NAFTA would create a giant sucking sound as U.S. employers...
For the production function in exercise 1, let the price of labor be w and the price of capital be r. a. The efficient usage function for labor is L* = __________________ . b. The efficient usage...
What assumptions about investors underlie Markowitz's theories regarding efficient portfolios?
You have been provided the follow information for a mutually exclusive capital budgeting problem: Project A Project B Period Cash Flow Period Cash Flow 0 - 430,000 0 -430,000 1 230,000 1 70,000 2...
You are required to calculate and analyze the following ratios by using below profit and loss statement : Total Asset turnover Fixed Asset turnover Price to Earnings Ratio Market to Book Ratio Net...
Kath and Kim each wish to borrow $5 million for five years, but Kath prefers to borrow at fixed rate while Kim prefers floating.However, Kim has a higher credit rating and has an absolute advantage...
Calculate the Macaulay durations of the Caltech century bonds, the 30-Year T-Bond, and the 30- Year Zero. In part (i), assume that the Caltech bond yields 4.74%; and in part (ii), assume it yields...
1. Define inventory planning and control and describe and discuss its two broad categories. 2. Describe the four main types of inventory. 3. Describe the various types of inventory classifications....
Define each of the following terms: a. Proxy; proxy fight; takeover; preemptive right; classified stock; founders' shares b. Closely held stock; publicly owned stock c. Intrinsic value (Po); market...
(a) Given a mean free path = 0.4 nm and a mean speed vav = 1.17 105 m/s for the current flow in copper at a temperature of 300 K, calculate the classical value for the resistivity of copper. (b)...
Cuevas Co. is in the process of developing a revolutionary new product. A new division of the company was formed to develop, manufacture, and market this new product. As of year-end (December 31,...
Recall that the general demand function for the demand curves in Figure 2.2 is Q d = 3,200 - 10P + 0.05M + 24P R Derive the demand function for D 2 in Figure 2.2. Recall that for D 2 income is...
Using a graph, explain carefully the difference between a movement along a demand curve and a shift in the demand curve.
What happens to demand when the following changes occur? a. The price of the commodity falls. b. Income increases and the commodity is normal. c. Income increases and the commodity is inferior. d....
My company has equity beta of 0.56, 5.02% cost of (risk-free) debt, and market risk premium is 5% over the risk-free rate. D/(D+E) ratio is -31.7% and E/(D+E) ratio is 131.7%. Corporate tax rate is...
Discuss the main factors which a company should consider when determining the appropriate mix of long-term and short-term sources of finance in its capital structure.
Evaluate the impact of central bank interest rate policies, such as the federal funds rate in the United States or the repo rate in India, on various sectors of the economy, including consumption,...

The production function is Q = ALa Kb, where a > 0 and b > 0. a.

Question:

Step by Step Answer:

a MP L aAL a1 K b b MP K bAL a K b1 c MRTS aK bL d If the iso...View the full answer

Managerial Economics Foundations of Business Analysis and Strategy

Students also viewed these Economics questions