i) Derive the output elasticity of labour in the following alternative productionfunction:Y = c + alnk + ßlnLii) Suppose B = 0.5 and other factors are fixed, explain the unit change in outputdue to a percentage change in labour.

Production Function Production Function represents the level of Output with the combination of…

i) Derive the output elasticity of labour in the following alternative production function: Y = c + alnk + BlnL ii) Suppose B = 0.5 and other factors are fixed, explain the unit change in output due to a percentage change in labour.

i) Derive the output elasticity of labour in the following alternative production function: Y = c + alnk + BlnL ii) Suppose B = 0.5 and other factors are fixed, explain the unit change in output due to a percentage change in labour.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.9P

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Question

i) Derive the output elasticity of labour in the following alternative production
function:
Y = c + alnk + ßlnL
ii) Suppose B = 0.5 and other factors are fixed, explain the unit change in output
due to a percentage change in labour.

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