The Long-run production function is given by; Y = 180 L0.8 K1.8Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt)a) Calculate Marginal Product of Labour (MPL) and Marginal Product of Capital (MPK), if L=12 and K=20 .b) Derive the equation for Isoquent and graphically show it by assuming L= 10, 15, 20 25 and 30. c) Determine factor intensity and returns to scale of this production function. d) Prove that the elasticity of labour is 0.8 and elasticity of capital is 1.8 .
The Long-run production function is given by; Y = 180 L0.8 K1.8Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt)a) Calculate Marginal Product of Labour (MPL) and Marginal Product of Capital (MPK), if L=12 and K=20 .b) Derive the equation for Isoquent and graphically show it by assuming L= 10, 15, 20 25 and 30. c) Determine factor intensity and returns to scale of this production function. d) Prove that the elasticity of labour is 0.8 and elasticity of capital is 1.8 .
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The Long-run production function is given by; Y = 180 L0.8 K
1.8
Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt)
a) Calculate Marginal Product of Labour (MPL) and Marginal Product of Capital (MPK), if L=12 and K=20 .
b) Derive the equation for Isoquent and graphically show it by assuming L= 10, 15, 20 25 and 30.
c) Determine factor intensity and returns to scale of this production function.
d) Prove that the elasticity of labour is 0.8 and elasticity of capital is 1.8 .
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