The Cobb-Douglas production function for a particular product is N(x,y)=80x64, where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product. Each unit of labor costs $40 and each unit of capital costs $100. Answer the questions (A) and (B) below. (A) If $500,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. Production will be maximized when using units of labor and units of capital. The maximum production is units. (Round to the nearest integer as needed.) (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product. The marginal productivity of money is (Round to four decimal places as needed.) The increase in production is units. (Round to the nearest unit as needed.)

The Cobb-Douglas production function for a particular product is N(x,y)=80x64, where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product. Each unit of labor costs $40 and each unit of capital costs $100. Answer the questions (A) and (B) below. (A) If $500,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. Production will be maximized when using units of labor and units of capital. The maximum production is units. (Round to the nearest integer as needed.) (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product. The marginal productivity of money is (Round to four decimal places as needed.) The increase in production is units. (Round to the nearest unit as needed.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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