A manufacturer estimates that the annual output at a certain factory is given by

units, where K is the capital expenditure in units of $1,000 and L is the size of the labor force in worker-hours.

a. Find the marginal productivity of capital and the marginal productivity of labor when the capital expenditure is $630,000 and the labor level is 830 worker-hours.

b. Should the manufacturer consider adding a unit of capital or a unit of labor to increase output more rapidly?

Transcribed Image Text:

Q(K, L) = 30K0.3L0.7