A manufacturer estimates that the annual output at a certain factory is given by K,L) = 40K0.8L0.2 units, where K is the capital expenditure in thousands of dollars a size of the labor force in worker-hours. Suppose that the current capital expenditure is 0000 and the labor level is 560 worker-hours. ind the current marginal productivity of capital QK- SWER: ind the current marginal productivity of labor QL. SWER: hould the manufacturer consider adding a unit of canital or a unit of labor in order to ir
A manufacturer estimates that the annual output at a certain factory is given by K,L) = 40K0.8L0.2 units, where K is the capital expenditure in thousands of dollars a size of the labor force in worker-hours. Suppose that the current capital expenditure is 0000 and the labor level is 560 worker-hours. ind the current marginal productivity of capital QK- SWER: ind the current marginal productivity of labor QL. SWER: hould the manufacturer consider adding a unit of canital or a unit of labor in order to ir
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 7E
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![A manufacturer estimates that the annual output at a certain factory is given by
Q(K, L) = 40KL0.2 units, where K is the capital expenditure in thousands of dollars and L is
0.8
the size of the labor force in worker-hours. Suppose that the current capital expenditure is
$300000 and the labor level is 560 worker-hours.
a. Find the current marginal productivity of capital Qk -
ANSWER:
b. Find the current marginal productivity of labor QL.
ANSWER:
c. Should the manufacturer consider adding a unit of capital or a unit of labor in order to increase
output more quickly?
OA. capital
B. labor](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0591f0ff-54d3-4fa2-a21d-b394ca5fc4fc%2F3264615c-3f71-4f77-bad4-f53e5f6168b2%2Fxnox9go_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A manufacturer estimates that the annual output at a certain factory is given by
Q(K, L) = 40KL0.2 units, where K is the capital expenditure in thousands of dollars and L is
0.8
the size of the labor force in worker-hours. Suppose that the current capital expenditure is
$300000 and the labor level is 560 worker-hours.
a. Find the current marginal productivity of capital Qk -
ANSWER:
b. Find the current marginal productivity of labor QL.
ANSWER:
c. Should the manufacturer consider adding a unit of capital or a unit of labor in order to increase
output more quickly?
OA. capital
B. labor
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