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Should the government encourage capital investment

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Reference no: EM131637733

Question: PRODUCTIVITY OF A COUNTRY The productivity of a South American country is given by the function

f(x, y) = 20x3/4y1/4

When x units of labor and y units of capital are used.

a. What is the marginal productivity of labor and the marginal productivity of capital when the amounts expended on labor and capital are 256 units and 16 units, respectively?

b. Should the government encourage capital investment rather than increased expenditure on labor at this time in order to increase the country's productivity?

Reference no: EM131637733

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