Consider the following production function: Y = F(K, L) = AK 0.4 L 1.0 . a) Calculate

Question:

Consider the following production function: Y = F(K, L) = AK^0.4 L^1.0.

a) Calculate the marginal product of labor.

b) Does this production function exhibit diminishing marginal product of labor?

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

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics Policy And Practice

ISBN: 978-0133424317

2nd Edition

Authors: Frederic Mishkin

See More Books

Question Posted: Feb 17, 2024 11:01 PM

See More Questions

This exercise explores in some more detail the relationship between production technologies and marginal product of labor. A: We often work with production technologies that give rise to initially...
Compute the (1) NPV and (2) PI for the cash flows of the following two projects. Assume the discount rate is 6.5%. After you complete your calculation, please enter your answer as the following...
The common stock of Fido Corporation was trading at $45 per share on October 15, 2010. A year later, on October 15, 2011, it was trading at $80 per share. On this date, Fidos board of directors...
Monitor uses activity-based costing. Two of Monitor's production activites are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for...
Give two ways to compute the variance of a continuous random variable.
Consider an underlying linear model, $y_{i}^{*}=\mathbf{x}_{i}^{\prime} \boldsymbol{\beta}+\epsilon_{i}^{*}$, where $\epsilon_{i}^{*}$ is normally distributed with mean zero and variance...
Use a financial calculator or computer software program to answer the following questions. a. What would be the future value (FV) of $19,378 invested now if the money remains deposited for eight...
3. Write as the sum and/or difference of logarithms. Simplify, if possible. 13 Jab. log (ab)
Suppose Equation 2 represents the production function of both Mexico and Spain. Use the following information to answer the next questions. a) Calculate total factor productivity for both countries...
Consider the following production function: Y = F(K, L) = A(2K + 3L). Does this production function exhibit constant returns to scale? (Replace K and L by 2K and 2L, respectively, and check if F(2K,...
How is Texas socially, economically, and politically diverse? What kind of impact this diversity has in our policy making process?
Define gaap 2. List 8-10 principles and define them
Uma held an annual review with her client who was delighted that her portfolio greatly outperformed the target return. At the meeting, her client informed Uma that she has moved up her retirement...
Near the end of the Year One, a company buys two derivatives that will come due in the next year. One of these derivatives was properly designed as a cash flow hedge. The other derivative was...
A situation in which the relative bargaining power of two parties in a transaction has more information than the other refers to what type of phenomenon? Explain briefly.
Although states may exercise their police power in a manner that has an incidental or indirect effect on aliens (immigrants], a state may not establish its own immigration policy or enforce state...
Does its management typically have complete control over a firms credit policy? As a general rule, is it more likely that a company would increase its profitability if it tightened or loosened its...
2. Assume a person bends forward to lift a load "with his back" as shown in Figure P12.42a. The person's spine piv- ots mainly at the fifth lumbar vertebra, with the principal supporting force...
The IMF does not enjoy a great reputation in many countries that were recipients of IMF loans or bailouts. Explain why many citizens were not happy with the role played by the IMF.
Why might a country that is suffering a recession not want to intervene in the foreign exchange market if its currency is overvalued? Assume this country participates in a fixed exchange rate regime.
What would be the effect of a devaluation on a countrys imports and exports? If a country imports most of the goods included in the basket of goods and services used to calculate the CPI, what do you...
If the interest rate is 11% compounded annually, what is the value of the following three investments? a. An investment that offers you $170 a year in perpetuity with the payment at the end of each...
Discuss how financial options and their valuation techniques play key roles in risk management? Explain.
How could you define the grouping criteria used to organize resources in the different purchasing departments?

Consider the following production function: Y = F(K, L) = AK 0.4 L 1.0 . a) Calculate

Question:

Step by Step Answer:

a The marginal product of labor is given by MPL YL AK04 L00 AK04 b Yes this production ...View the full answer

Macroeconomics Policy And Practice

Students also viewed these Business questions