21 3 3 The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital. (a) Compute the marginal productivities of labor and capital when x = 64 and y = 27. (b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units. (c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?
21 3 3 The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital. (a) Compute the marginal productivities of labor and capital when x = 64 and y = 27. (b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units. (c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 8E
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3 3
The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital.
(a) Compute the marginal productivities of labor and capital when x = 64 and y = 27.
(b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units.
(c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?
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Transcribed Image Text:2 1
3 3
The productivity of a country is given by f(x,y) = 900xy, where x and y are the amount of labor and capital.
(a) Compute the marginal productivities of labor and capital when x = 64 and y = 27.
(b) Use part (a) to determine the approximate effect on productivity of increasing capital from 27 to 28 units, while keeping labor fixed at 64 units.
(c) What would be the approximate effect of decreasing labor from 64 to 62.5 units while keeping capital fixed at 27 units?
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