EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
7th Edition
ISBN: 8220103455312
Author: Mankiw
Publisher: Cengage Learning US
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Question
Chapter 18, Problem 1QR
To determine
To determine: How the production function is related to marginal productivity of labor.
Expert Solution & Answer
Explanation of Solution
The production function represents the relationship between the quantity of factors of production and the total quantity output produced. Labor is one of the important factors of production. If the marginal factors of production increase, the total quantity of production also increases. That is, the changes in marginal product of labor directly affect the production function. The value of marginal product of labor is equal to the wage rate. Thus, the relationship between the value of marginal product of labor and
Economics Concept Introduction
Concept introduction:
Production function: Aproduction function shows the relationship between quantity of input and quantity of output used during the production process.
Marginal product of labor: Marginal product of labor refers to an additional product to the total product due to a change in one unit of labor.
Value of marginal product of labor: Value of marginal product of labor is the monetary value of the marginal product of labor.
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BEC 3701 - Assignments-...
KWAME NKRUMAH UNIVERSITY
TEACHING FOR EXCELLENCE
SCHOOL OF BUSINESS STUDIES
DEPARTMENT OF ECONOMICS AND FINANCE
ADVANCED MICRO-ECONOMICS (BEC 3701)
Assignments
INSTRUCTIONS:
Check instructions below:
LTE
1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote
P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of
the following:
a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks]
b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks]
c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks]
d) the Expenditure Function E(P1, P2, U°) [3 Marks]
e) Draw a diagram of the solution. There should be two graphs, one above the other; the
first containing the indifference curves and budget constraint that characterize the
solution to the consumer's choice problem; the second characterizing the demand…
How would you answer the question in the News Wire “Future Living Standards”? Why?
Chapter 18 Solutions
EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
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