Consider a firm with production function: Y = 2K1L². Suppose there is perfect competition. The real rental rate of capital is and the real wage is ww. a) What is the marginal product of capital in terms of KK and LL? The variables found in your answer should be: [K, L] b) What is the marginal product of labour in terms of KK and LL? The variables found in your answer should be: [K, L] c) What is the degree of homogeneity of the production function? d) What is the ratio of profits to output?

Consider a firm with production function: Y = 2K1L². Suppose there is perfect competition. The real rental rate of capital is and the real wage is ww. a) What is the marginal product of capital in terms of KK and LL? The variables found in your answer should be: [K, L] b) What is the marginal product of labour in terms of KK and LL? The variables found in your answer should be: [K, L] c) What is the degree of homogeneity of the production function? d) What is the ratio of profits to output?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 19PAE

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