ch3notes

# ch3notes - Output and Employment Factors of Production...

This preview shows pages 1–4. Sign up to view the full content.

Output and Employment Factors of Production Aggregate Output Capital: K Employment of Labor: N Total Factor Productivity: A Summary Measure of Technology Summary Measure of ‘Other’ Inputs Aggregate Production Function A Typical Functional Form: 7 0 3 0 . . N AK Y = Marginal Products K: Additional Y per unit of Additional K N: Additional Y per unit of Additional N Marginal Products Are Positive . Marginal Products Diminish as Inputs Proportional Increase in Both Factors Proportional Increase in Y

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
A Sample Production Function Y K N = 100 03 07 . . N\K 1 2 3 4 5 6 7 8 9 10 1 100 123 139 152 162 171 179 187 193 200 2 162 200 226 246 263 278 291 303 314 324 3 216 266 300 327 350 369 387 403 417 431 4 264 325 367 400 428 452 473 492 510 527 5 309 380 429 468 500 528 553 576 596 616 6 351 432 487 531 568 600 628 654 678 699 7 390 481 543 592 633 668 700 729 755 779 8 429 528 596 650 695 734 769 800 829 855 9 466 573 647 706 755 797 835 869 900 929 10 501 617 697 760 812 858 899 935 969 1000
Calculating MPN A = 100, K = 5 Employment Output MPN 0 0 - 1 162 162 2 263 101 3 350 87 4 428 78 5 500 72 6 568 68 7 633 65 8 695 62 9 755 60 10 812 57

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 21

ch3notes - Output and Employment Factors of Production...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online