At a certain factory, the daily output is approximately 40K1/3L¹/2 units, where K denotes the capital investment measured in units of $1,000 and L denotes the size of the labor force measured in worker-hours. Suppose that the current capital investment is $125,000 and that 900 worker-hours of labor are used each day. Use marginal analysis to estimate the effect that an additional capital investment of $1,000 will have on the daily output if the size of the labor force is not changed.
At a certain factory, the daily output is approximately 40K1/3L¹/2 units, where K denotes the capital investment measured in units of $1,000 and L denotes the size of the labor force measured in worker-hours. Suppose that the current capital investment is $125,000 and that 900 worker-hours of labor are used each day. Use marginal analysis to estimate the effect that an additional capital investment of $1,000 will have on the daily output if the size of the labor force is not changed.
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 12P
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