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  • Online Activity 3

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    Shayal Chand
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    The document discusses production functions for two scenarios. The first scenario has an output (Q) of 100 units, a wage (W) of $1, and an interest rate (r) of $1. This leads to labor (L) being 10 units and capital (K) being 1 unit. The second scenario has an output of 400 units, a wage of $4, and the same interest rate of $1. This results in labor being 20 units and capital being 4 units.

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    ONLINE ACTIVITY 3.docx

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    The document discusses production functions for two scenarios. The first scenario has an output (Q) of 100 units, a wage (W) of $1, and an interest rate (r) of $1. This leads to labor (L) being 10 units and capital (K) being 1 unit. The second scenario has an output of 400 units, a wage of $4, and the same interest rate of $1. This results in labor being 20 units and capital being 4 units.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    14 views1 page

    Online Activity 3

    Uploaded by

    Shayal Chand
    The document discusses production functions for two scenarios. The first scenario has an output (Q) of 100 units, a wage (W) of $1, and an interest rate (r) of $1. This leads to labor (L) being 10 units and capital (K) being 1 unit. The second scenario has an output of 400 units, a wage of $4, and the same interest rate of $1. This results in labor being 20 units and capital being 4 units.

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    © All Rights Reserved
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    of 1

    ONLINE ACTIVITY 3

    Q=LK MPL= dq/dl = LK


    Q=100units =L
    W=$1 MPK=dq/dl=LK
    r= $1 =L

    (MPL/MPK) = w/r Q=LK


    K/L=1/1 100=LK
    K=1 100=L (L)
    100= L2
    10=L

    Q=LK MPL= dq/dl = LK


    Q=400units =L
    W=$4 MPK=dq/dl=LK
    r= $1 =L

    (MPL/MPK) = w/r Q=LK


    K/L=4/1 400=LK
    K=4 400=L (L)
    400= L2
    20=L

    S11158357 SHAYAL CHAND

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