Justin Bains
New member
Consider the production function of an enterprise
f(x, y) = 60x^(3/4)y^(1/4)
which gives the numer of units of goods produced when utilizing x units of
labor and y units of capital. The enterprise currently employs 81 units of
labor and invests 16 units of capital.
(a) If the capital is held fixed at its current value, and the amount of labor
increased by one unit, find the approximate change in the quantity of
goods produced. This quantity is known as the marginal productivity
of labor.
(b) Similarly, holding the amount of labor fixed at its current value, determine the approximate increase in productivity generated by an increase
in capital by one unit. This is called the marginal productivity of capital.
Thanks
f(x, y) = 60x^(3/4)y^(1/4)
which gives the numer of units of goods produced when utilizing x units of
labor and y units of capital. The enterprise currently employs 81 units of
labor and invests 16 units of capital.
(a) If the capital is held fixed at its current value, and the amount of labor
increased by one unit, find the approximate change in the quantity of
goods produced. This quantity is known as the marginal productivity
of labor.
(b) Similarly, holding the amount of labor fixed at its current value, determine the approximate increase in productivity generated by an increase
in capital by one unit. This is called the marginal productivity of capital.
Thanks