Consider a firm that faces the following production function: q = f(L, K) = L1/2 K1/2...
Consider a firm that faces the following production function: q = f(L, K) = L1/2 K1/2 where q is output, L is labor, and K is capital. Use this production function to answer the following questions.
(a) What is the marginal product of labor (MPL)?
(b) Does the MPL follow the law of diminishing returns? How do you know?
(c) What is the marginal product of capital (MPK)?
(d) Does the MPK follow the law of diminishing returns? How do you know?
(e) How does adding one more unit of capital affect the marginal product of labor? That is, what is ∂MPL/∂K ? What does this tell you about the relationship between labor and capital in the production process for this firm?
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Consider a firm that faces the following production function: q
= f(L, K) = L1/2 K1/2...
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Question 7 Consider the following production function: Q=AL' K• Assume A > 0. Further assume 0...
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