ECON 202 Lecture 1: Chapter+3-answers+to+short+answer+questions.pdf
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1. replacing k and l by 2k and 2l respectively yields: (2(2 ) 3(2 )) The equation above shows that this production function, although not a cobb-douglas, also exhibits constant returns to scale. 0. 4: according to the answer to part (a), this production function does not exhibit diminishing marginal product of labor. One might think that this is not a desirable characteristic of a production function. However, under some circumstances it is correct to assume that increases in the labor input will not decrease the marginal contribution of labor to total output (mpl). Educational improvements will increase labor"s productivity, and the law of diminishing marginal product will be offset by the fact that more highly educated workers can become more productive. Spain total factor productivity: mexico"s per capita income: ,777: spain"s per capita income is around 4 times mexico"s per capita income.
