Suppose firm y production function is given

Assignment Help Macroeconomics
Reference no: EM1327344

Analyzing given production function - Cobb Douglas Equation

Assume Firm Y's production function is given by the following Cobb Douglas equation

Q = 0.5 x L^0.6 x K^0.5

where L denotes labor and K denotes capital.

The production function exhibits (increasing/decreasing/constant) returns to scale.

1. If labor hours increase by 10%, what is the percentage change in output (provide a numerical answer)?

2. If capital decreases by 10%, what is the percentage change in output (provide a numerical answer)?

3. If the number of labor hours increases by 10% and the number of hours of capital used decreases by 10%, what is the percentage change in output?

 

Reference no: EM1327344

Questions Cloud

The benefits of improved disclosure : Do the benefits of improved disclosure justify the additional disclosure costs? Who gains the most benefit from these disclosures?
Compute the cross elasticity of demand : Compute the cross elasticity of demand among kingston's product and the rival product.
Time value of money techniques : Based solely on time value of money techniques (rationale), do you think it is logical for people to over pay their taxes during the year and get a refund?
What aspects of information technology interests you : Network administrator - What aspects of Information Technology interests you and what career aspirations you have in the field?
Suppose firm y production function is given : Suppose Firm Y's production function is given by the following Cobb Douglas equation
Explain strategic management- most important problem facing : Explain Strategic Management- Most Important Problem Facing Amazon and How do you balance between your commitment to shareholders and your commitment to the community
An ice cream shop read in the local paper : An ice cream shop read in the local paper in which the elasticity of market demand for ice cream
How technology can be used to enhance the metrics : How technology can be used to enhance the metrics - enhance the metrics report generation and dissemination process
Protection of unreasonable searches and seizures : Please describe the â??emergency administrative searchâ? exception to the general rule that a warrant must be issued for a lawful search. a) What is â??reasonable suspicionâ? in the context of the 4th Amendment?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd