3. Assume the production function is Q = 4K0.5L0.5, and K = 4 in the short run. Find the marginal product of labor. Using derivatives, show that the production faces diminishing marginal return to labor. If the market wage is w, express the optimal number of labor (L) in terms of w. Are they positively or negatively related, and why?

3. Assume the production function is Q = 4K0.5L0.5, and K = 4 in the short run. Find the marginal product of labor. Using derivatives, show that the production faces diminishing marginal return to labor. If the market wage is w, express the optimal number of labor (L) in terms of w. Are they positively or negatively related, and why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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