Question
In: Economics
1. The White Noise Corporation has estimated the following Cobb-Douglas production function using monthly observations for...
1. The White Noise Corporation has estimated the following Cobb-Douglas production function using monthly observations for the past two years:
ln Q = 2.773 + 0.20 ln K + 0.70 ln L + 0.70 ln N
where Q is the number of units of output, K is the number of units of capital, L is the number of units of labor, and N is the number of units of raw materials. With respect to the above results, answer the following sections when K = 50, L = 250, and N =870.
a. Q
b. Rewrite the estimated function in the form of a power function.
c. Find the marginal products of capital, labor, and raw materials
d. Find the value of the output elasticities of K, L, and N
e. Determine whether the returns to scale are increasing, decreasing, or constant
f. Suppose the price of capital is $1000 per unit, the price of labor is $700, and the price of raw materials is $200 per unit. This is an optimal combination of resources
g. What price would the company have to charge for the product to maximize profits
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
1. The White Noise Corporation has estimated the following Cobb-Douglas production function using monthly observations for...
1. The White Noise Corporation has estimated the following
Cobb-Douglas production function using monthly observations for the
past two years:
ln Q = 2.773 + 0.20 ln K + 0.70 ln L + 0.70 ln
N
where Q is the number of units of output, K is the number of
units of capital, L is the number of units of labor, and N is the
number of units of raw materials. With respect to the above
results, answer the following...
Consider an economy with the following Cobb-Douglas production function:
Chapter 7, Labor Market Regulation (3
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workers.(a) Derive the equation describing labor demand in this economy
as a function of the real wage and the capital stock
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Y = Ka(LE)1-a
The economy has a capital share of 1/3, a saving rate of 24
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b. What is the steady-state growth rate in output per
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Consider the Cobb-Douglas production function ?=??^??^??^? where
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Cobb-Douglas...again Consider the Cobb-Douglas production
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a. Consider a short-run problem where the firm's level of
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that shows the optimal amount of labor (L) the firm would want to
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b. Use your answer for part (a)...
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elasticity with respect to capital equal to 0.3. Also given are the
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5. A Cobb-Douglas production function will yield a cost function that has constant Marginal Cost a....
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