Pomme manufacture Wifidgets. They use both labour, L, and capital, K, in their production of Wifidgets. Both L and K are measured in hours. The production. method they use requires that at least one labour and one capital is always employed. (a) Pomme have a Cobb-Douglas technology which means that their production function is: Q(L, K) = (LK) 0.5. The production method requires that at least one labour and one capital is always employed. Find the marginal product of labour and marginal product of capital. How does production change as Pomme employ more labour? How does production change as Pomme employ more capital? Sketch the production function with regard to labour and with regard to capital. Compute the marginal technical rate of substitution. Sketch the isoquants.
Pomme manufacture Wifidgets. They use both labour, L, and capital, K, in their production of Wifidgets. Both L and K are measured in hours. The production. method they use requires that at least one labour and one capital is always employed. (a) Pomme have a Cobb-Douglas technology which means that their production function is: Q(L, K) = (LK) 0.5. The production method requires that at least one labour and one capital is always employed. Find the marginal product of labour and marginal product of capital. How does production change as Pomme employ more labour? How does production change as Pomme employ more capital? Sketch the production function with regard to labour and with regard to capital. Compute the marginal technical rate of substitution. Sketch the isoquants.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Pomme manufacture Wifidgets. They use both labour, L, and capital, K, in their
production of Wifidgets. Both L and K are measured in hours. The production.
method they use requires that at least one labour and one capital is always
employed.
(a) Pomme have a Cobb-Douglas technology which means that their production
function is: Q(L, K) = (LK) 0.5. The production method requires that at least
one labour and one capital is always employed.
Find the marginal product of labour and marginal product of capital.
How does production change as Pomme employ more labour? How
does production change as Pomme employ more capital? Sketch the
production function with regard to labour and with regard to capital.
Compute the marginal technical rate of substitution. Sketch the
isoquants.
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