Homework Help is Here – Start Your Trial Now!
Business
Economics
* 1. Returns to scale in production: Do the following production functions exhibit increasing, constant, or decreasing returns to scale in K and L? (Assume A is some fixed positive number.) (a) Y = K1/211/2 (b) Y = K2/312/3 (c) Y = K1/31/2 (d) Y = K + L (e) Y = K + K1/31/3 (f) Y = K1/3L2/3 + A (g) Y = K1/312/3 - A 2. The "per person" versions of production functions: Write each production function given below in terms of output per person y = Y/L and capital per E

* 1. Returns to scale in production: Do the following production functions exhibit increasing, constant, or decreasing returns to scale in K and L? (Assume A is some fixed positive number.) (a) Y = K1/211/2 (b) Y = K2/312/3 (c) Y = K1/31/2 (d) Y = K + L (e) Y = K + K1/31/3 (f) Y = K1/3L2/3 + A (g) Y = K1/312/3 - A 2. The "per person" versions of production functions: Write each production function given below in terms of output per person y = Y/L and capital per E

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
Question 1 & 2 if possible please. I need the steps to solve these questions. Thanks!
98 Chapter 4 A Model of Production EXERCISES * 1. Returns to scale in production: Do the following production functions exhibit increasing, constant, or decreasing returns to scale in K and L? (Assume A is some fixed positive number.) (a) Y = K ¹/21/2 (b) Y = K2/312/3 (c) Y = K1/3L1/2 (d) Y = K + L (e) Y = K + K1/3L1/3 (f) Y = K1/3L2/3 + A (g) Y= K1/312/3 - A 2. The "per person" versions of production functions: Write each production function given below in terms of output per person y = Y/L and capital per person k = K/L. Show what these "per person" versions look like in a graph with k on the horizontal axis and y on the vertical axis. (Assume A is some fixed positive number.) (a) Y = K1/3L2/3 and Y = K3/4L1/4 (on the same graph) (b) Y = K (c) Y = K + AL (d) Y = K - AL * 3. The Black Death: In the middle of the fourteenth century, an epidemic known as the Black Death killed about a third of Europe's population, about 34 mil- lion people. While this was an enormous tragedy, the macroeconomic con sequences might surprise you: over the next century, wages are estimated to have been higher than before the Black Death. (a) Use the production model to explain why wages might have been highe (b) Can you attach a number to your explanation? In the model, by how much would wages rise if a third of the population died from disease? 4. Solving the production model: Suppose the production function at the co of our model is given by Y = AK 3/4L1/4 (that is, assume the exponents of capital and labor are 3/4 and 1/4 rather than 1/3 and 2/3). (a) Create a new version of Table 4.1 for the new version of the model. Wh are the five equations and five unknowns? (Hint: The hiring rules for capit and labor will change in the obvious way.) (b) Now solve these equations to get the solution to the model. Put you solution in the same form as Table 4.2. (c) What is the solution for the equilibrium level of output per person? 5. The empirical fit of the production model: The table below reports per cap GDP and capital per person in the year 2017 for 10 countries. Your task to fill in the missing columns of the table. (a) Given the values in columns 1 and 2, fill in columns 3 and 4. That compute per capita GDP and capital per person relative to the US val K E 6. r 7. T th th to- of all (a) (b) (c) I
Transcribed Image Text:98 Chapter 4 A Model of Production EXERCISES * 1. Returns to scale in production: Do the following production functions exhibit increasing, constant, or decreasing returns to scale in K and L? (Assume A is some fixed positive number.) (a) Y = K ¹/21/2 (b) Y = K2/312/3 (c) Y = K1/3L1/2 (d) Y = K + L (e) Y = K + K1/3L1/3 (f) Y = K1/3L2/3 + A (g) Y= K1/312/3 - A 2. The "per person" versions of production functions: Write each production function given below in terms of output per person y = Y/L and capital per person k = K/L. Show what these "per person" versions look like in a graph with k on the horizontal axis and y on the vertical axis. (Assume A is some fixed positive number.) (a) Y = K1/3L2/3 and Y = K3/4L1/4 (on the same graph) (b) Y = K (c) Y = K + AL (d) Y = K - AL * 3. The Black Death: In the middle of the fourteenth century, an epidemic known as the Black Death killed about a third of Europe's population, about 34 mil- lion people. While this was an enormous tragedy, the macroeconomic con sequences might surprise you: over the next century, wages are estimated to have been higher than before the Black Death. (a) Use the production model to explain why wages might have been highe (b) Can you attach a number to your explanation? In the model, by how much would wages rise if a third of the population died from disease? 4. Solving the production model: Suppose the production function at the co of our model is given by Y = AK 3/4L1/4 (that is, assume the exponents of capital and labor are 3/4 and 1/4 rather than 1/3 and 2/3). (a) Create a new version of Table 4.1 for the new version of the model. Wh are the five equations and five unknowns? (Hint: The hiring rules for capit and labor will change in the obvious way.) (b) Now solve these equations to get the solution to the model. Put you solution in the same form as Table 4.2. (c) What is the solution for the equilibrium level of output per person? 5. The empirical fit of the production model: The table below reports per cap GDP and capital per person in the year 2017 for 10 countries. Your task to fill in the missing columns of the table. (a) Given the values in columns 1 and 2, fill in columns 3 and 4. That compute per capita GDP and capital per person relative to the US val K E 6. r 7. T th th to- of all (a) (b) (c) I
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

Could you please provide me with the steps for each part? I would like to see the steps. Thanks!

 

Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Returns to scale
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS