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Tutorial 6
Tutorial 6
Tutorial 6
Tutorial 5
Q1. You are given the following information:
Output 50 50 50 50 50 50 50 50
Unit of Labor 10 15 20 25 30 35 40 45
Units of Capital 70 68 57 47 38 30 23 17
Questions: (i) Using the above information draw a curve. What do we call such a curve.? (ii) Find MRTSL,K for each combination. Q2. Suppose that you are given the following production function:
Q = 100K0.6L0.4
Determine the marginal product of capital and the marginal product of labor when K = 25 and L = 100. Q3. For each of the following production functions, determine whether returns to scale are decreasing, constant, or increasing a) Q = 25K0.5L0.5 b) Q = 2K + 3L + 4KL c) Q = 100 + 3K + 2L d) Q = 20K0.6L0.5 Q4. Consider the following Cobb-Douglas production function
Q = 56K0.38L0.72
a) Calculate elasticity of production with respect to labor. b) Calculate elasticity of production with respect to capital.
D2
= nPD - PD / P2 - (P)2