Consider the Cobb-Douglas Production Function F(L,K)= AL^αK^β

question 45

Essay

Consider the Cobb-Douglas production function F(L,K)= AL^αK^β.Suppose that α = 2,β = 3,the firm has 3 units of capital and the firm's general productivity level is 20.
(a)What is the firm's long-run production function?
(b)What is the firm's short-run production function?
(c)If the firm employs 10 workers,what are the marginal products of labor and capital?
(d)If the firm employs 10 workers,what is the marginal rate of technical substitution for labor with capital?
(e)Does this firm's technology exhibit increasing,decreasing or constant returns to scale?

---

Definitions:

Share Our Wealth Society

A program proposed by Huey Long during the Great Depression in the United States, advocating for wealth redistribution to curb poverty and inequality.

Guaranteed Annual Income

A policy proposal to provide all citizens with a certain amount of money annually from the government, intended to reduce poverty and inequality.

Huey Long

An influential and controversial American politician from Louisiana, known for his populist policies during the early 20th century.

AAA (Agricultural Adjustment Act)

A New Deal legislation passed in 1933 aimed at boosting agricultural prices by reducing surpluses through the payment of subsidies to farmers.