Wheat is produced according to the production function q = 100(K^{0.8}L^{0.2}) a. Beginning with...
Question:
Wheat is produced according to the production function {eq}q = 100(K^{0.8}L^{0.2}) {/eq}
a. Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and the marginal product of capital are both decreasing.
b. Does this production function exhibit increasing, decreasing, or constant returns to scale?
Marginal product of labor and capital
Marginal product of labor is referred to as the change in total output due to the employment of additional unit of labor, keeping other factors of production constant. The marginal product of capital is referred to as the change in total output due to the usage of an additional unit of capital, keeping other factors of production constant.
Answer and Explanation: 1
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View this answerThe production function of wheat is given below:
{eq}{\rm{q}} = 100\left( {{{\rm{K}}^{0.8}}{{\rm{L}}^{0.2}}} \right) {/eq}
Here,
q is the number...
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