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Suppose that the following Cobb - Douglas production function represents the economy of Malaysia: Y F K, L AK 0.3L0.7. Assuming output, capital and labour to be RM10 trillion, RM8 trillion and 20 million workers respectively, (a ) Calculate the marginal product of labour (b) Calculate the marginal product of capital (c) Does the above-mentioned production function exhibit constant returns to scale? Please provide reasoning to support your answer.

Suppose that the following Cobb - Douglas production function represents the economy of Malaysia: Y F K, L AK 0.3L0.7. Assuming output, capital and labour to be RM10 trillion, RM8 trillion and 20 million workers respectively, (a ) Calculate the marginal product of labour (b) Calculate the marginal product of capital (c) Does the above-mentioned production function exhibit constant returns to scale? Please provide reasoning to support your answer.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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 1.5CE
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Suppose that the following Cobb - Douglas production function represents the economy of Malaysia: Y F K, L AK 0.3L0.7. Assuming output, capital and labour to be RM10 trillion, RM8 trillion and 20 million workers respectively, (a ) Calculate the marginal product of labour (b) Calculate the marginal product of capital (c) Does the above-mentioned production function exhibit constant returns to scale? Please provide reasoning to support your answer.
Transcribed Image Text:Suppose that the following Cobb - Douglas production function represents the economy of Malaysia: Y F K, L AK 0.3L0.7. Assuming output, capital and labour to be RM10 trillion, RM8 trillion and 20 million workers respectively, (a ) Calculate the marginal product of labour (b) Calculate the marginal product of capital (c) Does the above-mentioned production function exhibit constant returns to scale? Please provide reasoning to support your answer.
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