exercise 4 - 20 40 60 80 100 120 Cobb-Douglas Investment...

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Surenuja Srikanthan 210928621 Comments Comment In this excercise we used the Cobb_Douglas formula to calculate the investments that can come from the amount of labourers hired compared to the machinery bought. Using this formula, we solved for the variable L (which is the investement in labour) with respect to two equations. The first one connected the labour cost to the output supply (S), the investment in machinary (M) and the elastisites of production (a_machinery and a_labour). The purpose is to maximize the output supply which is S. L(S)=(S/(f*(M^a_machinery)))^(1/a_labour) L(K)=(K-M)/e
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Surenuja Srikanthan 210928621 Parameters Constants a_mechinery 1.00 a_labour 1.20 f 0.10 e 0.75 K 75.00 S 50.00 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74
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Unformatted text preview: 20 40 60 80 100 120 Cobb-Douglas Investment Model Column B Column C Investment in Mechinery Investment in Labour Surenuja Srikanthan 210918621 The Data M L(S) L(K) 100.00 2 99.61 97.33 4 55.9 94.67 6 39.87 92.00 8 31.37 89.33 10 26.05 86.67 12 22.38 84.00 14 19.68 81.33 16 17.61 78.67 18 15.96 76.00 20 14.62 73.33 22 13.5 70.67 24 12.56 68.00 26 11.75 65.33 28 11.05 62.67 30 10.43 60.00 32 9.88 57.33 34 9.4 54.67 36 8.96 52.00 38 8.56 49.33 40 8.21 46.67 42 7.88 44.00 44 7.58 41.33 46 7.3 38.67 48 7.05 36.00 50 6.81 33.33 52 6.59 30.67 54 6.39 28.00 56 6.2 25.33 58 6.02 22.67 60 5.85 20.00 62 5.69 17.33 64 5.55 14.67 66 5.41 12.00 68 5.27 9.33 70 5.15 6.67 72 5.03 4.00 74 4.91 1.33...
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This note was uploaded on 02/05/2011 for the course COMPUTER 101 taught by Professor Turpin during the Spring '11 term at York University.

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exercise 4 - 20 40 60 80 100 120 Cobb-Douglas Investment...

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