What is the scale elasticity of F(K,L) = K^2 + 2 x sqrt(L), where K denotes capital and L denotes labor. What relationship between capital and labor must hold for scale elasticity to equal one?
What is the scale elasticity of F(K,L) = K^2 + 2 x sqrt(L), where K denotes...
3. What is the scale elasticity of F(K,L) K22L, where K denotes capital and L denotes labor? What relationship between capital and labor must hold for scale elasticity to equal one?
We can generally demonstrate a relationship between scale elasticity and the slope of the average cost curve. Here, we'll demonstrate the result for only one input. Consider a (continuously differentiable and strictly increasing) production function F(L), where L denotes labor. 4. (a) Letting w denote the wage rate for labor, we can note that the cost function is C = WL, where L is the amount of labor necessary to produce q units of output, i.e.so that q F(L). dc...
We can generally demonstrate a relationship between scale elasticity and the slope of the average cost curve. Here, we'll demonstrate the result for only one input. Consider a (continuously differentiable and strictly increasing) production function F(L), where L denotes labor. 4. e) letting w denote the wage rate for labor, we can note that t f is cwL, q F(L) where L is the amount of labor necessary to produce q units of output, i.e. so that What is the...
8. Consider the production function Q = (-1/2 + K1/2)2/3, where L denotes labor and K denotes capital. How many of the following statements are true for this production function? • Production exhibits increasing returns to scale. • For each additional unit of labor, the firm must give up decreasing amounts of capital to maintain output. If the firm is currently using 2 units of labor and 8 units of capital, then according to the MRTS it can trade 2...
Suppose a firm has production function F(XL)=VK+2, denotes labor. What are the marginal products of capital and labor? What returns to scale does the production function exhibit? 1. where K denotes capital and L
1. Consider the production function ?(?, ?) = (?1/2 + ?1/2)2/3 , where L denotes labor and K capital. This production function exhibits A. constant returns to scale. C. decreasing returns to scale. D. increasing returns to scale.
1.The aggregate production function is Y = F(K, L) where Y = real GDP, K = capital and L = labor. For Y = F(K, L) = K1/3Lb where b = 0 there are A.decreasing returns to scale B.increasing returns to scale C.constant returns to scale D.none of the other answers is correct. E. we cannot determine the returns to scale 2.If y = f(x) = ln U(x) then dy/dx = f’(x) = a. none of the other answers is...
Consider the following production function Q(K,L)=100(?^1/2 + ?^1/2 )^2/3 where K is capital and L is labor. 1.1) Determine the returns of scale. 1.2) Find the output elasticity for the production function. 1.3) Interpret your answer in part (1.2)?
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...
Here we have the production function y=f(K,L)=K3L, where K is capital input and L is labor input. Let K>0, L>0. 1. What are the marginal products of capital and labor re- spectively? 2. Please compute the technical rate of substitution (we as- sume K is on the horizontal axis). 3. Dose this production function show diminishing technical rate of substitution (in absolute value) when K increases? Please give a brief proof. 4. Please prove that this production function features increas-...