5. APK function is given by: APL=KL+4. At the moment producer uses 10 units of capital and 20 units of labor. a) Find formula for the production function and current output. b) Provide an interpretation of APL at current point

5. APK function is given by: APL=KL+4. At the moment producer uses 10 units of capital and 20 units of labor. a) Find formula for the production function and current output. b) Provide an interpretation of APL at current point

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.

Question

5. APK function is given by: APL=KL+4. At the
moment producer uses 10 units of capital and
20 units of labor.
a) Find formula for the production function and
current output.
b) Provide an interpretation of APL at current
point
c) What can be said about returns to scale in
case of this production function? Explain.

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