1.1 Calculate Q when L = 60 and K = 210 [1] 1.2 Calculate Q when both inputs are increased by 10%. 1.3 Compare your answers when Q in 1.1 is increased by 10%. What does this imply about the level of returns to scale?
1.1 Calculate Q when L = 60 and K = 210 [1] 1.2 Calculate Q when both inputs are increased by 10%. 1.3 Compare your answers when Q in 1.1 is increased by 10%. What does this imply about the level of returns to scale?
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Costs And The Supply Of Goods
Section: Chapter Questions
Problem 9CQ
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![Question 1
Given the Cobb - Douglas production function, Q =
L^0.5 K ^0.7
1.1 Calculate Q when L = 60 and K = 210 [1]
1.2 Calculate Q when both inputs are increased by 10%.
1.3 Compare your answers when Q in 1.1 is increased by
10%. What does this imply about the level of returns to
scale?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d8383fc-abfb-4f3a-b394-eb91005b1f56%2Fbee63d93-ad60-47fe-9039-77ce6202412c%2Fj8ztqul_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 1
Given the Cobb - Douglas production function, Q =
L^0.5 K ^0.7
1.1 Calculate Q when L = 60 and K = 210 [1]
1.2 Calculate Q when both inputs are increased by 10%.
1.3 Compare your answers when Q in 1.1 is increased by
10%. What does this imply about the level of returns to
scale?
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