Question: Suppose a firm's production function initially took the form Q = 500(L + 3K). However, as a result of a manufacturing innovation, its production function

Suppose a firm's production function initially took the form Q = 500(L + 3K). However, as a result of a manufacturing innovation, its production function is now Q = 1000(0.5L + 10K).
a) Show that the innovation has resulted in technological progress in the sense defined in the text.
b) Is the technological progress neutral, labor saving, or capital saving?

Step by Step Solution

★★★★★

3.27 Rating (150 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a It is possible to write the two production functi... View full answer

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

Document Format (1 attachment)

Word file Icon

846-B-E-D-S (2166).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

A firm's production function is initially Q = KL, with MPK = 0.5(L/K) and MPL = 0.5(K/L). Over time, the production function changes to Q = KL, with MPK = L and MPL = K. a) Verify that this change...

Q:

A firm's production function is initially Q = KL, with MPK = 0.5(L/K) and MPL = 0.5(K/L). Over time, the production function changes to Q = KL, with MPK = L and MPL = 0.5(K/L). a) Verify that this...

Q:

In analyses of the sources of economic growth, a common statistic reported about the U.S. economy is labor productivity. Defined as output per hour of work, labor productivity is a simple measure of...

Q:

6.27. Suppose a firms production function initially took the form Q ! 500(L # 3K ). However, as a result of a manufacturing innovation, its production function is now Q ! 1,000(0.5L # 10K ).

Q:

Suppose a firm's production function initially took the form Q = 500(L + 3K). However, as a result of a manufacturing innovation, its production function is now Q = 1000(0.5L + 10K). a.Show that the...

Q:

CHAPTER 4 Vertical Integration: Theory and Policy The law and economics of vertical integration have long been subject to controversy. Roger Blair and David Kaserman's recent review of the issues...

Q:

4- Let U(X,Y) = JXY. Let I = $100, Px = $10 and P, = $10 be the initial set ofprices and income. Now, let P,' rise to $25. What are the substitution and income effects of this change in prices? A)...

Q:

From a management perspective, formulate and explain your company's offensive or defensive strategy to improve its market position in the next 3 years. Explain whether your company will be a first...

Q:

From a management perspective, formulate and explain your company's offensive or defensive strategy to improve its market position in the next 3 years. Explain whether your company will be a first...

Q:

microeconomics Suppose your utility for having a net worth of m is (m) = In(m). Your net worth is $450,000. You are thinking about opening a Starbucks franchise, which will require an initial...

Q:

Find the volume of the solid generated by revolving about the line y = 2 the region in the first quadrant bounded by the parabolas 3x2 - 16y + 48 = 0 and x2 - 16y + 80 = 0 and the y-axis.

Q:

Prove using the definition of the limit that lim, 4 x - V +5 1. You need to find & in terms of e so that if a 4

Q:

The beta of the market portfolio is: Multiple Choice - 1 . 0 . 0 . 5 . 1 . 0 . 0 . 0 .

Q:

Jared is in the execution phase of a residential housing construction project. He has been informed of major scope changes from stakeholders in the middle of the project. These changes involve...

Q:

1. The trade-off with entry is that an increase in the number of firms leads to higher _________but greater _______. 2. When products are differentiated by location, the entry of firms generates...

Q:

1. The trade-off with entry is that an increase in the number of firms leads to higher _________but greater _______. 2. When products are differentiated by location, the entry of firms generates...

Q:

1. The trade-off with entry is that an increase in the number of firms leads to higher _________but greater _______. 2. When products are differentiated by location, the entry of firms generates...

Q:

Since it is too difficult to project young businesses' financial statements, they no longer conduct short-term financial forecasts. a) True b) False The prime rate is the interest rate charged by...

Q:

The following are debts in disguise except: I) accounts payable II) leases III) underfunded pensions

Q:

(a) Construct frequency and relative frequency distributions. (Round to the nearest integer as needed.) Class Limits Frequency f Relative Frequency i Data Table 21-25 % 26-30 % Full data set 31-35 %...