Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

=) Isabella owns a manufacturing firm that produces IoT devices. Her daily production function C+5 A is given by q = 108K*LY. Let X=

-) Isabella owns a manufacturing firm that produces IoT devices. Her daily production functionis given by q = 108K*L. Let X 

=) Isabella owns a manufacturing firm that produces IoT devices. Her daily production function C+5 A is given by q = 108K*LY. Let X= and let Y B 20 20 i) Suppose L www 0.5D, where L is the number of workers employed each day and K = 0.25D +A, where K is the number of machines being used each day. What is Isabella's daily output? [2 mark] ii) Suppose Isabella increased both capital and labour by 29%, calculate her new output [1 mark] iii) State the Marginal Productivity of Capital, given the increase in input factors. [1 mark] iv) What is the percentage change in output as a result of the increase in input factors? [1 mark] State the type of returns to scale. If it is increasing returns to scale, state "IRS" as your answer, if it is constant returns to scale, state CRS as your answer and if it is decreasing returns to scale, then state "DRS" as your answer. [1 mark]

Step by Step Solution

3.41 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

b Daily production function V 108 K LY 3 X C 5 20 Y AD ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Douglas Bernheim, Michael Whinston

2nd edition

73375853, 978-0073375854

More Books

Students also viewed these Economics questions

Question

What is a price consumption curve for a good?

Answered: 1 week ago

Question

2. What are the three different ethics described by Jensen?

Answered: 1 week ago

Question

1. Describe Kohlbergs three broad stages of moral development.

Answered: 1 week ago