In the first problem set, you studied the constant elasticity of substitution (CES) production functionY = zF(K, N):Y = z [0(aK)" + (1 – 0)(BN)"]*where Y is output, the constant z measures productivity, K is physical capital, N is labor, 0 <0 <1and y are parameters and 0

Given: Y=z[θ(αK)γ+(1-θ)(βN)γ]1γ

In the first problem set, you studied the constant elasticity of substitution (CES) production function Y = zF(K, N): Y = z [0(aK)" + (1 – 0)(3N)"]* where Y is output, the constant z measures productivity, K is physical capital, N is labor, 0 < 0 < and y are parameters and 0 < a < 1, 0 < 3 < 1 represent the capital and labor shares, respectively. Figure 1: Cobb-Douglas production functions for different capital and labor shares 7. 6. a-0.3: -0.7 - 05: -05 2. a-0.7, -03 12 16 20 Labor 1. Assume y= 1 and take N as given. Derive the marginal product of capital 4. 3. Output

In the first problem set, you studied the constant elasticity of substitution (CES) production function Y = zF(K, N): Y = z [0(aK)" + (1 – 0)(3N)"]* where Y is output, the constant z measures productivity, K is physical capital, N is labor, 0 < 0 < and y are parameters and 0 < a < 1, 0 < 3 < 1 represent the capital and labor shares, respectively. Figure 1: Cobb-Douglas production functions for different capital and labor shares 7. 6. a-0.3: -0.7 - 05: -05 2. a-0.7, -03 12 16 20 Labor 1. Assume y= 1 and take N as given. Derive the marginal product of capital 4. 3. Output

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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