Production function is as follows -
Y = A K0.3 N0.7
Calculate the marginal product of capital (MPK)
Putting the value of A, N, and K in MPK
MPK = 1.5
Thus,
The marginal product of capital is 1.5
Hence, the correct answer is the option (B).
SHOW WORK 8) Suppose the economy's production function is Y = AK"3 No.7. Suppose K =...
SHOW WORK 3) Suppose the economy's production function is Y AK03 No7. IfK 2000, N 100, and A- 1, ten Y-246. If K and N both rise by 20%, and A is unchanged, by how much does Y increase? A) 5% B) 1090 C) 1590 3 A 0 20%
An economy's production function is Y = AK^0.3L^0.7, and the economy's total output in equilibrium is $ 290 billion. Total capital income in this economy is
15. Consider an economy, with a production function given by Y-AK03L07. This economy's annual GDP growth rate is 5%. Also assume that L and Kare both growing at annual rates of 2%. Calculate the growth rate of total factor productivity for this economy. a. 2.0% b. 3.0% 4.0% c. d. 5.0% 16. Suppose output is determined by a Cobb-Douglas production function Y=AK L1 Where 0ca<1. If total factor productivity (A) remains constant, but labour (L) and capital (K) inputs both...
Assume the following Cobb-Douglas production function: Assume the following Cobb-Douglas production function: Y = AK 0.4 20.6 If Y=12; K=8; and L=95, answer the following questions (SHOW ALL YOUR WORK): - 1. What is total factor productivity? 2. With your answer in (1), assume L=95 and estimate the production function with respect to K 3. Estimate the marginal product of capital and demonstrate diminishing marginal product of capital 4. Estimate real capital income 5. Estimate the share of capital income...
1. (The AK Model) Consider an economy with an aggregate production function given by Y=F(K) = AK of capital. The law of motion for capital is just as in the neoclassical model where s and δ are the savings rate and depreciation rate, respectively. a) Show whether F(K) exhibits constant, decreasing or increasing returns to scale. Com pute the marginal product of capital. Does this function satisly the neoclassical assumptions?
2. Our economy's production function is Y = 3.1 6.K 6. Stock of capital is K = 64, and labor force is L=125. a) Calculate real wages and real rent of capital. b) Show, that income is distributed among the owners of factors of production according their respective exponents in the production function. c) Calculate economic profit.
12. Suppose an economy's production function is specified by y = A(√K,√L), where A represents the productivity of resources, K the quantity of capital resources, and L the quantity of labor resources. A. Find potential output when A = 10, K = 49, and L =9. B. Find potential output when A = 10, K = 49, and labor resources are 3, 6, and 12. C. Plot the levels of output associated with 3, 6, 9, and...
1. (The AK Model) Consider an economy with an aggregate production function given by y = F(K) = AK Capital is the only relevant factor of production. A is fixed and represents the productivity of capital. The law of motion for capital is just as in the neoclassical model where s and δ are the savings rate and depreciation rate, respectively. a) Show whether F(K) exhibits constant, decreasing or increasing returns to scale. Com- pute the marginal product of capital....
xt Problem 9 Suppose that the economy's production function is given by where Y is output, K is capital, and N is the number of workers. The steady-state level of capital per worker in terms of the saving rate, s, and the depreciation rate, 8, is ON=□ Property format your oxpression using the too sinthe palette Hover over tools t see keyboard shortcuts. E character) as person t can be Enter your arawer in the answer box and then click...
1. Suppose an economy's production is defined by the following neoclassical production function: Y=50K 1/3L 2/3. Suppose further that the economy wide supply of capital and labor are given as 125 and 64. What will be the equilibrium rental rate of capital in this economy? a. 10.67 b. 62.5 c. 1,333 2. Suppose an economy's production is defined by the following neoclassical production function: Y=50K 1/3L 2/3. Suppose further that the economy wide supply of capital and labor are given...