Consider the following production function using capital (K) and labor (L) as inputs. Y = 10.K0.5L0.5. The marginal product of labor is (MPL=) 5.K0.5/L0.5, and the marginal product of capital (MPK) = 5.L0.5/K0.5.
a. If K = 100 and L=100 what is the level of output Y?
b. If labor increases to 110 while K=100, what is the level of output?
c. If labor increases to 110 while K=100, what is the marginal product of labor?
d. If labor increases to 120 while K=100, what is the marginal product of labor?
e. What happens to the marginal product of labor when labor increases while capital remains unchanged?
f. Estimate Marginal Products of Capital in the above cases of (c) and (d) using the equation given in the question.
g. When labor increases from 100 to 110 and then to 120 while the level of capital does not change, what happens to the Marginal Product of Capital?
Consider the following production function using capital (K) and labor (L) as inputs. Y = 10.K0.5L0.5. The marginal product of labor is (MPL=) 5.K0.5/L0.5, and the marginal product of capital (MPK) = 5.L0.5/K0.5.
a. If K = 100 and L=100 what is the level of output Y?
b. If labor increases to 110 while K=100, what is the level of output?
c. If labor increases to 110 while K=100, what is the marginal product of labor?
d. If labor increases to 120 while K=100, what is the marginal product of labor?
e. What happens to the marginal product of labor when labor increases while capital remains unchanged?
f. Estimate Marginal Products of Capital in the above cases of (c) and (d) using the equation given in the question.
g. When labor increases from 100 to 110 and then to 120 while the level of capital does not change, what happens to the Marginal Product of Capital?
