Acme produces anvils using labor (L) and capital (K) according to the production function Q= f(L,K)=LK...
Acme produces anvils using labor (L) and capital (K) according to the production function
Q= f(L,K)=LK
with associated marginal products MPL=K, MPK =L. The price of labor is w=2 and the price of capital is r=1.
Does Acme's production function for anvils exhibit increasing, constant or decreasing returns to scale? Justify your answer
Homework Answers
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Acme produces anvils using labor (L) and capital (K) according
to the production function
Q= f(L,K)=LK...
1. A production function is given by f(K, L) = L/2+ v K. Given this form,...
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the second question
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QUESTION 10 Acme Eggs produces eggs. Acme has estimated this production function for its eggs: Q...
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1. A production function is given by f(K, L) = L/2+ v K. Given this form, MPL = 1/2 and MPK-2 K (a) Are there constant returns to scale, decreasing returns to scale, or increasing returns to scale? (b) In the short run, capital is fixed at -4 while labor is variable. On the same graph, draw the 2. A production function is f(LK)-(L" + Ka)", where a > 0 and b > 0, For what values of a and...
the second question
In Example 6.4 wheat is produced according to the production function: q=100(k0.6 0.4) Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and the marginal product of capital are both decreasing (Round responses to two decimal places.) The MPK at 5 units of capital is 156.12 The MP at 6 units of capital is 144.02 The MP at 50 units of labor is 8.84 The MP...
Part 2: Short answer questions Question 1 (4 points): A sausage firm has a production function of the form: q = 5LK+K+L where q is units per day, L is units of labor input and K is units of capital output. The marginal product of the two inputs are: MPL = 5K+1, MPK = 5L +1. Price per unit of labor: w= $15, price per unit of capital: v= $15. Both labor and capital are variable. a. Write down the...
2. For the following Cobb-Douglas production function, q = f(L,K) = _0.45 0.7 a. Derive expressions for marginal product of labor and marginal product of capital, MP, and MPK. b. Derive the expression for marginal rate of technical substitution, MRTS. C. Does this production function display constant, increasing, or decreasing returns to scale? Why? d. By how much would output increase if the firm increased each input by 50%?
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