Cobb and Douglas used the equation P ( L , K ) = 1.01 L 0.75 K 0.25 to model the American economy from 1899 to 1922, where L is the amount of labor and K is the amount of capital. (See Example 14.1.3.) (a) Calculate P L and P K . (b) Find the marginal productivity of labor and the marginal productivity of capital in the year 1920, when L = 194 and K = 407 (compared with the assigned values L = 100 and K = 100 in 1899). Interpret the results. (c) In the year 1920, which would have benefited production more, an increase in capital investment or an increase in spending on labor?
Cobb and Douglas used the equation P ( L , K ) = 1.01 L 0.75 K 0.25 to model the American economy from 1899 to 1922, where L is the amount of labor and K is the amount of capital. (See Example 14.1.3.) (a) Calculate P L and P K . (b) Find the marginal productivity of labor and the marginal productivity of capital in the year 1920, when L = 194 and K = 407 (compared with the assigned values L = 100 and K = 100 in 1899). Interpret the results. (c) In the year 1920, which would have benefited production more, an increase in capital investment or an increase in spending on labor?
Solution Summary: The author explains the function P(L,K)=1.01L0.75K
Cobb and Douglas used the equation P(L, K) = 1.01L0.75K0.25 to model the American economy from 1899 to 1922, where L is the amount of labor and K is the amount of capital. (See Example 14.1.3.)
(a) Calculate PL and PK.
(b) Find the marginal productivity of labor and the marginal productivity of capital in the year 1920, when L = 194 and K = 407 (compared with the assigned values L = 100 and K = 100 in 1899). Interpret the results.
(c) In the year 1920, which would have benefited production more, an increase in capital investment or an increase in spending on labor?
Use Euler's method to numerically integrate
dy
dx
-2x+12x² - 20x +8.5
from x=0 to x=4 with a step size of 0.5. The initial condition at x=0 is y=1. Recall
that the exact solution is given by y = -0.5x+4x³- 10x² + 8.5x+1
Find an equation of the line tangent to the graph of f(x) = (5x-9)(x+4) at (2,6).
Find the point on the graph of the given function at which the slope of the tangent line is the given slope.
2
f(x)=8x²+4x-7; slope of the tangent line = -3
Chapter 14 Solutions
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