Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 5: Suppose that a country's production is described by the following production function: r : KDJELDJS a. Derive the Marginal Product of Labour {MPL}
Question 5: Suppose that a country's production is described by the following production function: r : KDJELDJS a. Derive the Marginal Product of Labour {MPL} for this production function. Express your result in terms of the ratio W1. Does the MPL depend on current level of K? Does it depend on current level of L? Is it always positive? Conrm the existence of the diminishing marginal product of labour. I]. Derive the Marginal Product of Capital {MPH} for this production function. Express your result in terms of the ratio Will Does the MPH depend on current level of K? Does it depend on current level of L? Is it always positive? Donnn the existence of the diminishing returns on capital. 1:. Compute the country's GDP, GDP per capita1 lleL and lleF-Z for K = 20 and L = 14] Do you think that the GDP would be higher for K = 10 and L = 2n Explain your answer and check it by computing the corresponding output. d. Compute the country's GDP, for H = 4'01 and L = 211 Compare it with your answer in d and explain if this function has constant returns to scale or not
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started