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The productivity of a country is given by f(x,y)=100x0.78y0.22, where x is the amount of labor and y is the amount of capital. (a) Compute
The productivity of a country is given by f(x,y)=100x0.78y0.22, where x is the amount of labor and y is the amount of capital. (a) Compute the marginal productivities of labor and capital when x=300 and y=500. (b) Use part (a) to determine the approximate effect on productivity of increasing capital from 500 to 501.5 units, while keeping labor fixed at 300 units. (c) What would be the approximate effect of decreasing labor from 300 to 299.5 units while keeping capital fixed at 500 units
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