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Unformatted text preview: (II) Marginal Products MPL = M y/ M L = 2/3 L 2/3-1 K 1/3 = 2/3 (K/L) 1/3 MPK = M y/ M K = 1/3 K 1/3-1 L 2/3 = 1/3 (L/K) 2/3 Implications: If K constant, increases in L decrease MPL (standard negative sloped MPL curve). If L constant, increases in K decrease MPK (standard negative sloped MPK curve). If K/L increases, then MPL increases and MPK decreases. If MPL increases, then K/L has increased. If MPK increases, then K/L has decreased....
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- Spring '08