Question: Consider the production function Y = K N. a. Compute output when K = 49 and N = 81. b. If both capital and labour

Consider the production function Y = K N.

a. Compute output when K = 49 and N = 81.

b. If both capital and labour double, what happens to output?

c. Is this production function characterised by constant returns to scale? Explain.

d. Write this production function as a relation between output per worker and capital per worker.

e. Let K/N = 4.

What is Y/N? Now double K/N to 8.

Does Y/N double as a result?

f. Does the relation between output per worker and capital per worker exhibit constant returns to scale?

g. Is your answer in (f ) the same as your answer in (c)?

Why or why not?

h. Plot the relation between output per worker and capital per worker. Does it have the same general shape as the relation in Figure 11.5? Explain.

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