21 3 3 The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital. (a) Compute the marginal productivities of labor and capital when x = 64 and y = 27. (b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units. (c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?

21 3 3 The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital. (a) Compute the marginal productivities of labor and capital when x = 64 and y = 27. (b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units. (c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2 1
3 3
The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital.
(a) Compute the marginal productivities of labor and capital when x = 64 and y = 27.
(b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units.
(c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?
...

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