spring 1. Consider the following Cobb-Douglas production function: Y = AK³L¹. (1) Both factors of production are assumed to be exogenously given and fixed over time. In partic- ular, the available capital for production is K = 10 and the readily available labor is L = 270. While the total factor productivity is given at A = 54. The size of production in this economy is (a) 800 (b) 1,620 (c) 2520 (d) 14,580 (e) not enough information is given (c) 108; 108 (d) 2, 108 (e) 108, 2 _units. 2. Using the information from question (1) before, it is possible to calculate the real rental price of capital (R/P) and the real wage rate (W/P). R/P = and W/P = (a) 2; 2 (b) 53; 72 3. Using the information from question (1) before, we can calculate the real capital income to be units, while the real labor income to be units. (a) 108; 2 (b) 216; 4 (c) 540; 1080 (d) 1080, 540 (e) 2, 108

spring 1. Consider the following Cobb-Douglas production function: Y = AK³L¹. (1) Both factors of production are assumed to be exogenously given and fixed over time. In partic- ular, the available capital for production is K = 10 and the readily available labor is L = 270. While the total factor productivity is given at A = 54. The size of production in this economy is (a) 800 (b) 1,620 (c) 2520 (d) 14,580 (e) not enough information is given (c) 108; 108 (d) 2, 108 (e) 108, 2 _units. 2. Using the information from question (1) before, it is possible to calculate the real rental price of capital (R/P) and the real wage rate (W/P). R/P = and W/P = (a) 2; 2 (b) 53; 72 3. Using the information from question (1) before, we can calculate the real capital income to be units, while the real labor income to be units. (a) 108; 2 (b) 216; 4 (c) 540; 1080 (d) 1080, 540 (e) 2, 108

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 10E

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