Consider Two Competitive Economies That Have the Same Quantities of Labor

question 66

Essay

Consider two competitive economies that have the same quantities of labor (L = 400) and capital (K
= 400), and the same technology (A = 100). The economies of the countries are described by the following Cobb-Douglas production functions:
North Economy: Y = A L0.3K0.7
South Economy: Y = A L0.7K0.3
a.Which economy has the larger total production? Explain.
b.In which economy is the marginal product of labor larger? Explain. c.In which economy is the real wage larger? Explain.
d.In which economy is labor's share of income larger? Explain.

Understand the concept of replacement planning and its role in HR planning.

Recognize the importance of mentoring and coaching in leader and employee development.

Understand the importance of identifying and developing high-potential employees for leadership roles.

Recognize the benefits and functions of mentorship in an organization.

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Definitions:

Average Inventory

Average inventory is a calculation that estimates the value or quantity of inventory a company holds over a specific period, helpful for assessing inventory management efficiency.

Carrying Cost

Carrying cost refers to the total cost of holding inventory, which includes warehousing, handling, depreciation, opportunity costs, and insurance.

Carrying Costs

Costs that rise with increases in the level of investment in current assets.

Average Inventory

The mean value of inventory over a certain time period, used for inventory management and planning.