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Econ. 102. Homework 3. Due : March 8, 2010. (Honor the due date) *******. 1. Show your calculation explicitly. Otherwise only partial credit will be given. 2. Use the ruler to draw graphs. (Also show the scale explicitly). 3. E-mail submission of your answer will not be accepted. 4. Do not copy someone else’s answer. *******. 1. Explain the following terms carefully:  (a) Production function. (b) MPL and MPK. (c) PxMPL = W. (d) Diminishing marginal product. 2. Consider an economy has the following Cobb-Douglas production function Y = L 1/2 K 1/2 = √ LK, (a) The factors of production are L = 100, K = 25. Assume that it is at full employment. Find Y.  (b) Explain carefully what is the constant returns to scale? Does the production function exhibit the constant returns to scale? Please show it explicitly.  (c) Find MPL and MPK by using the formula in NGM.  (d) Real total income Y = (W/P)L + (R/P)K. Find the real total income.  (e) Explain carefully under what assumptions we can obtain RGDP via
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This note was uploaded on 09/08/2010 for the course ECON 102 at San Jose State University .