ECON 100B Lecture Notes - Lecture 4: Marginal Product, Production Function, Isoquant
Document Summary
Leontief: f (l, k) = min (l, k) if l = k, then q = l = k, graphical representation. Marginal product of labor is increase in output generated by one unit increase in labor f (l + l, k (bar) ) mp l (l, k) l same for marginal product of capital. Note how mrts changes over isoquant: mrts. The less labor we use, more to replace next worker and maintain same output. More labor we use, less capital an additional unit of labor replaces. More capital we use, less labor we need to replace next unit of capital and maintain the same output. Diminishing means getting closer to zero, but not getting smaller and smaller even though the mrts is negative that"s why we take |mrts| for it going down i. e. |-3| = 3. | k" (l) | = q (bar) 1/b (a/b) / l a/b+1: can directly say as l increases, the mrts is diminishing.
