Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 17.2, Problem 4ST
To determine
Determine the variables that are shift factors.
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Suppose a soap-manufacturing production process is described by the following
equation:
Y = a + b log K + с log L
Where,
Y= Output (number of soaps produced)
K=Capital
L=Labor
a, b and c are constants
Suppose 0<a<1, 0< b<1
a. Find the Marginal Product of Labor (MPL) and Marginal Product of Capital (MPK)
in the production of soap
b. Is MPL diminishing, increasing or constant as L increases?
c. Is MPK diminishing, increasing or constant as K increases?
Consider the following production function: Q = (6L + 3K)¹/2
1. What is the Marginal Product of Labor (MPL)? What is the Marginal Product of Capital
(MPK)? Are they diminishing?
2. What is the Average Product of Labor (APL)? What is the Average Product of Capital (MPK)?
3. What is the TRSL,K? Is the absolute value of TRSLK diminishing in L or K?
4. Are there constant, decreasing, or increasing returns to scale?
The period of a time when a firm is able to change all of inputs factors of production is called the:A) economic termB) short runC) accounting termD) long run
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