Imagine you own a business firm all by yourself. During the first quarter of your production, you come up with the following information that: 2. • Output Elasticity of Capital (x) is 0.45 • Output Elasticity of Labour (y) is 0.55 • Total Factor Productivity is 10 (i) What kind of business firm is the one that you own? Mention 2 of its characteristics. (ii) Derive the marginal productivity of capital and labour, by means of Cobb- Douglas production function. (iii) If Y = F (K, L) where K = 1000 and L = 400, calculate the values of MPK and %3D MPL. (2 + 4 + 4 = 10 marks)

Imagine you own a business firm all by yourself. During the first quarter of your production, you come up with the following information that: 2. • Output Elasticity of Capital (x) is 0.45 • Output Elasticity of Labour (y) is 0.55 • Total Factor Productivity is 10 (i) What kind of business firm is the one that you own? Mention 2 of its characteristics. (ii) Derive the marginal productivity of capital and labour, by means of Cobb- Douglas production function. (iii) If Y = F (K, L) where K = 1000 and L = 400, calculate the values of MPK and %3D MPL. (2 + 4 + 4 = 10 marks)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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