Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 3, Problem 2RQ
To determine
Economic interpretation of properties of production function is to be determined.
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Students have asked these similar questions
An increase in the number of hours worked would
shift the production function upward
shift the production function downward
shift the production function outward
not shift the production function
Use the Cobb-Douglas production function to show that when the number of units of labor and the number of units of capital are doubled, the production level is also doubled.
Please refer to the table attached.
The number of fish caught per week on a trawler is a function of the crew size assigned to operate the boat. Based on past data, consider the following production function identifying the relationship between output and labor input. You may assume that capital is fixed at 10 units.
Answer all of the question.
Calculate APL and MPL.
Graph APL and MPL. Do they have the expected shape?
On your graph, identify the three stages of production.
Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 1NPCh. 3 - Prob. 2NPCh. 3 - Prob. 3NPCh. 3 - Prob. 4NPCh. 3 - Prob. 5NPCh. 3 - Prob. 6NPCh. 3 - Prob. 7NPCh. 3 - Prob. 8NPCh. 3 - Prob. 9NPCh. 3 - Prob. 10NPCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 7AP
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- The production function is the relationship between the maximum amount of output that can be produced and the inputs required to make that output. Comment.arrow_forwardThe production function q = 9K0.8L0.1 exhibits: a. increasing retruns to scale b. constant returns to scale c. decreasing returns to scale d. none of the above The production function q = K1.2 + 3L1.2 exhibits a. increasing retruns to scale b. constant returns to scale c. decreasing returns to scale d. none of the abovearrow_forwardSome economists believe that the US. economy as a whole can be modeled with the following production function, called the Cobb-Douglas production function: Y = AK¹/32/3 where Y is the amount of output K is the amount of capital, L is the amount of labor, and A is a parameter that measures the state of technology. For this production function, the marginal product of labor is MPL = (2/3) A(K/L)¹/³. Suppose that the price of output P is 2, A is 3, K is 1,000,000, and L is 1/100. The labor market is competitive, so labor is paid the value of its marginal product. a. Calculate the amount of output produced Y and the dollar value of output PY. b. Calculate the wage W and the real wage W/P. (Note: The wage is labor compensation measured in dollars, whereas the real wage is labor compensation measured in units of output)arrow_forward
- Consider the following Cobb-Douglas production function: Y = AK"LB where Y is aggregate output, K is capital, L is labour, and A, a, and ß are positive constants.arrow_forwardCountry A and Country B both have the production function: Y = F(K,L) = K^(1/3)L^(2/3). a) Does this production function have constant returms to scale? Explain.arrow_forwardWhich of the following statements best describes a production function? Group of answer choices all levels of inputs that could produce a given level of output the maximum profit generated from given levels of inputs the maximum level of output generated from given levels of inputs all levels of output that can be generated from given levels of inputsarrow_forward
- The production function feature called "increasing returns to scale" means that if we increase capital and labor by 10 percent each, we increase output by 20 percent. True or False?arrow_forwardSuppose the production function of an item is Q = 3L + 2K. When the inputs are doubled in this production function, the output is also doubled. which of the following statements are true? Statement 1: Q will increase by 2 if K increases by 1, Statement 2: Q will increase by 3 if L increases by 1,arrow_forwardConsider a Production Function given by the form z=F(K,L)=(K^(0.3) + L^(0.7) )^2 where K is the amount of capital and L is the amount of labor. Further, we assume that K>0 and L>0. Take the first order partial derivative of the production function with respect to capital and labor. What does the first order partial derivative imply? (Hint: Remember the definitions of the variables)arrow_forward
- In each blank type increasing, decreasing or constant to describe the returns to scale of the given production function. 1 a. The production function Q 3 = 3L°K exhibits returns to scale. b. The production function Q = LK? exhibits c. The production function Q = 3L +K exhibits returns to scale. %3D returns to scale.arrow_forwardWhat is the average product of labor, given that the level of labor equals 10, total output equals 1200, and the marginal product of labor equals 200? Suppose the production function is given by Q= K + 2L. What is the average product of capital when 5 units of capital and 2 units of labor are employed?arrow_forwardConsider the Cobb-Douglas production function displayed below: Y=AK N¹ - Suppose that GDP is 100, capital is 50, labor is 10, and TFP is 6.17. Let α = 0.3. What is the marginal product of capital? Marginal product of capital equals 4.46 . (Round your answer to two decimal places.) That's incorrect.arrow_forward
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