Consider the production functions given below: a. Suppose that the production function faced by a 30-weight ball bearing producer is given by Q = 4K^0 · 5 L^0 · 5 , where MPK = 2K^0.5 x L^0.5 and MPL = 2K^0 · 5 L^ –0.s_ Do both labor and capital display diminishing marginal products? Find the marginal rate of technical substitution for this production function. (Hint: The MRTS = MPL/MP K) Does this production function display a diminishing marginal rate of substitution? b. Suppose that the production function faced by a 40-weight ball bearing producer is given by Q = 4KL, where MP K = 4L and MP L = 4K. Do both labor and capital display diminishing marginal products? Find the marginal rate of technical substitution for this production function. Does this production function display a diminishing marginal rate of substitution? c. Compare your answers to (a) and (b). Must labor and capital display diminishing marginal products in order for the MRTS to diminish?
Social work degree core subject (Advanced Practice in Social Work) (Skills analysis)
August 27, 2017
7:15 am
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