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Math Help - Marginal products of labor and capital

  1. #1
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    Marginal products of labor and capital

    Hey,

    has anybody an idea how to compute of marginal products of labor and capital from this excercise?



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  2. #2
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    Re: Marginal products of labor and capital

    post the whole question.

    Hint: consider three cases:
    1) aK < bL
    2) aK > bL
    3) aK=bL

    and find the marginal capital in each.
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  3. #3
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    Re: Marginal products of labor and capital

    The whole question is :
    Compute marginal products of labor and capital and the marginal rate of technical substitution and sketch the isoquants for the following production function: [min{aK,bL}]^α

    marginal products of labor: α[min{aK,bL}]^α-1*(0, if L>K; b if L<K)? is it correct?
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  4. #4
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    Re: Marginal products of labor and capital

    i dont think thats right.

    case 1: aK < bL
    Y = min(aK,bL)^a \rightarrow Y = (aK)^a

    MPL=0.

    case 1: aK > bL
    Y = min(aK,bL)^a \rightarrow Y = (bL)^a

    MPL =abL^{a-1}



    case 3: aK=bL
    MPL=0


    So the overall MPL function is abL^{a-1} if bL < aK, 0 otherwise.
    Last edited by SpringFan25; May 5th 2012 at 04:21 PM.
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