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Given a CES production function, q=(k,l)=[(ak)^p+(bl)^p]^p/y 1. Derive the cost function for this production function. 2. Derive the Labour demand function and capital demand function 3. Calculate MPl, MPk and MRTS
) Suppose the production function is q = 12 K.5L.5 . Calculate the MRTS (MPK/MPL) when: a) K = 200, L = 300 b) K = 50, L = 400 c) K= 900, L = 2000
Suppose the firm's production function is given by q= F(K, L)= K2L with MPL=K2, MPK=2KL The price per unit of capital is 10 and the price per unit of labor is 5. Find the cost minimizing quantity of labor to produce 500,000 units of output. Please round to the closest integer.
1. Suppose the production function is given by Q = LK, where MPL = K and MPK - L. The level of output Q = 100 and both wage and interest rates are equal to one, so that war- a) Given that the wage increases to 4. determine the elasticity of demand for labour at the new wage. Indicate whether the wage bill will increase or decrease as wage increases to 6. b) Find the linear demand function for labour...
1) Assume that a country's production function is Y = AK 0.3 L 0.7 (and MPK = 0.3 Y/K ) The ratio of capital to output is 3, the growth rate of output is 3 percent, and the depreciation rate is 4 percent. Assume the economy is in a steady state. a.Write down the steady state condition and calculate the saving rate for this steady state. b.Write down the Golden Rule for this economy. Is this economy in the Golden...
6. a) Consider the following Cobb-Douglas production function: Q AK°L where Q output, K labour, L labour Express the above function in a logarithmic form
1. Suppose the production of digital cameras is characterized by the production function q F(K, L)- KL (MPL = K, MPK = L), where q represents the number of digital cameras produced. Suppose that the price of labor is $10 per unit and the price of capital is S1 per unit. (a) Graph the isoquant for q-121 000. (b) On the graph you drew for part a), draw several isocost lines including one that is tangent to the isoquant you...
Consider the following CES production function: Q= AlaL +1-a)K-]%, capital, respectively where Q is output and L and K are inputs labour and i) Interpret the parameters A,a,t and V ii) Show that if f-0, the two input Labour and capital are imperfect substitutes in production Consider the following CES production function: Q= AlaL +1-a)K-]%, capital, respectively where Q is output and L and K are inputs labour and i) Interpret the parameters A,a,t and V ii) Show that if...
Given the production function q = f(L, K), we obseve that MPL > APL. What also must be true? A. %Upper DeltaΔq < %Upper DeltaΔL B. %Upper DeltaΔq = %Upper DeltaΔL C. %Upper DeltaΔq > %Upper DeltaΔL
1. Suppose the production function is given by Q = LK, where MPL = K and MPK = L. The level of output Q = 100 and both wage and interest rates are equal to one, so that w== a) Given that the wage increases to 4, determine the elasticity of demand for labour at the new wage. Indicate whether the wage bill will increase or decrease as wage increases to 6. b) Find the linear demand function for labour...
1) An economy has the following aggregate production function: Y= Ak^1/3L^2/3 and capital stock, labour supply and total factor productivity of 512, 1000, and 5 respectively. a) What is the effect of a 50% change in the capital stock on the marginal product of labour and the marginal product of capital? b) What is the effect of this change in the capital stock on Output and Consumption, if taxes are 800 and the Marginal Propensity to Consume is 2/3? I...