Question: THE PRODUCTION FUNCTION AND CONSTANT RETURNS TO SCALE Consider the production function Y = 2K2N a. Compute output when K 49 and N

THE PRODUCTION FUNCTION AND CONSTANT RETURNS TO SCALE Consider the production function Y = 2K2N

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 characterized by constant returns to scale? Explain.

d. Write this production function as a relationship 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 more or less than double?

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 15–5 ? Explain.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Microeconomics Principles Applications Questions!

PLS HELP ME 6. (4p) Consider a Heckscher-Ohlin model with two countries, Home and Foreign, and two factors of production, land (T) and labor (L). Land and labor are used to produce two goods, gadgets...

Please help me with these multiple choice questions. Thank you! a) From 1991 to 2018, by how much more did output grow in Japan than in Canada? 10% 27% 36% 54% 66% b) Assume a production function...

Question Consider an economy with the following Cobb-Douglas production function (with constant returns to scale): Consider an economy with the following Cobb-Douglas production function (with...

This is a solow growth model problem I don't know how to solve this problem(4.1.3.) help me please This is the Solow Growth Model [8) which models the growth of the ratio of capital to labor under...

QUESTION FOUR Pot Ltd produces a single product. The management currently uses an absorption costing approach but is considering using a variable costing approach in the future. The following data...

1. A researcher at a Central Bank models aggregate production in the economy using the following linear regression model where y is a T1 vector with tth element equal to the natural logarithm of...

> A Moving to another question will save this response. Question 1 If GDP grows at 5% per year, how long will it take for GDP to double? 7 years 14 years 17.5 years 35 years > Moving to another...

Assuming a Cobb-Douglas production function with constant returns to scale then, as K rises with L and A constant, it will be the case that: a)the marginal product of labour will fall and the...

Q2 About the AK model is true: Select one: a. Capital does not contribute to any technological progress. b. The model allows us to have long periods of positive growth rates. c. Saving rates are...

f3 it is,, Assume that the Phillips curve is given as: t= t e+ 0.1 - 2ut a) What is the natural unemployment rate? Now the expectations for inflation are: te= (1 - ) (bar)+ t 1 (bar) can be any...

Explain about the Solar Industry trends (Australian based)over years.

Crude oil has a viscosity of about 0.8 Pas at normal temperature. A 50-km pipeline is to be constructed from an oil field to a tanker terminal. The pipeline is to deliver oil at the terminal at a...

15-7 Etchey Company identifies that 46% of its assets are financed by creditors. Which of the following reveals this result? a. Current ratio b. Times-interest-earned ratio c. Debt ratio d. Inventory...

a. Financial statements should aid the user of the statements in making decisions. In your opinion, would the user of the statements be aided if there were a distinction between financial reporting...