Statistical analysis indicates that a0.8 and b0.3. the, Ask an Expert

Economics

According to the chief engineer at the Zodiac Company, Q=ALaKb, where Q is the output rate, L is the rate of labor input, and K is the rate of capital input. Statistical analysis indicates that a=0.8 and b=0.3. The firm's owner claims the plant has increasing returns to scale.

a. Is the owner correct?
b. If b were 0.2 rather than 0.3, would she be correct?
c. Does output per unit of labor depend only on a and b? Why or why not?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M946365

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question answer all of the bulleted question related to the

Question: Answer all of the bulleted question related to the esay question on the the goverment budget. It's ok to use the outside source for the question, but please cite the source properly. ( write about one or two pa ...

Question suppose you are ceo of a manufacturing company and

Question: Suppose you are CEO of a manufacturing company, and oil prices suddenly double, which boosts the inflation rate by 5%. While your principal job is to keep quarterly earnings rising, you are concerned that a rec ...

Qestion assume that the production function is given by y

Question: Assume that the production function is given by Y = A K^.4 L^.6 where Y = National Income = GDP, K = 100, L = 400, and A = 10. a. Calculate National Income (Y)? Derive the equation for the marginal product of l ...

Question consider a situation in which a risk-neutral

Question: Consider a situation in which a risk-neutral principal wishes to contract an agent to work on a project. The project produces output x = e + e where e is the agent's effort and e is a normally distributed rando ...

Question 1 what motivations are assumed to underlie the

Question: 1. What motivations are assumed to underlie the "public interest" and the "economic" theories of legislation (self-interest paradigm)? 2. Must a theory be accurate 100 percent or even 80 percent of the time to ...

Question a find the nash equilibrium and also explain how

Question: a. Find the Nash equilibrium (and also explain how you come up with this equilibrium) b. Explain the implication of this equilibrium with regard to its stability and its role as an efficient allocator of resour ...

Question john is planning on repaying a debt of 25000 with

Question: John is planning on repaying a debt of $25,000 with a quarterly payment $1,200 for the next 23 quarters and a final payment of "X" dollars at the end of 24-th quarter. If the interest rate is 12% per year, comp ...

Question virtually all purchases of consumer nondurable

Question: Virtually all purchases of consumer nondurable goods do not involve extended credit terms. Yet that component of GDP exhibits a very marked cyclical pattern, always turning down during recessions. Can these dec ...

Questions - 1 externalities united airlines flies in and

Questions - 1. Externalities. United Airlines flies in and out of Logan Airport carrying people to cities throughout the world. Their flights are noisy and spread pollution over East Boston and Revere, disturbing the res ...

Question the current price of a stock is 50 suppose the

Question: The current price of a stock is $50. Suppose the following distribution describes the possible prices that the stock will be in 1 year: the probability the stock price will be 45 is 0, the probability the stock ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert