Consider a Production Function for an Economy

question 100

Essay

Consider a production function for an economy:
Y = 20(L^.5K^.4N^.1)
where L is labor, K is capital, and N is land. In this economy the factors of production are in fixed supply with L = 100, K = 100, and N = 100. a. What is the level of output in this country?
b. Does this production function exhibit constant returns to scale. Demonstrate by example.
c. If the economy is competitive so that factors of production are paid the value of their marginal products, what is the share of total income will go to land?

---

Definitions:

Peers

Individuals of similar age or status, especially other children or adolescents who from a child's social group.

Transductive Reasoning

A type of reasoning typical in early childhood that involves making connections between individual instances without using abstract logic.

Egocentrism

The inability to distinguish between one's own perspective and someone else's perspective.

Artificialism

In the context of developmental psychology, it is the belief common in children that the environment and its features are created by human beings.