Mock Multiple Choice, the MPs
Kyle F. Herkenhoff
*
UCLA
Department of Economics
April 15, 2011
1
Marginals
Which of the following are true?
(We assume a CobbDouglas production function
Y
=
AK
α
L
1

α
)
(a) If
α
= 1
/
3, then a 6% increase in labor results in a 2% increase in output.
(b) If
α
= 1
/
3, then a 6% increase in labor results in a 4% increase in output.
(c) If
α
= 1
/
5, then
MP
K
K
Y
=
1
5
(d) If
α
= 1
/
5, then
MP
K
K
Y
=
4
5
(e) The following statement
MP
K
K
+
MP
L
L
=
Y
holds for
α
= 1
/
3 but not for
α
= 1
/
5.
(f) Two of the above
(g) Three of the above
(h) None of the above
*
Correspondence: [email protected]
1
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
ANS:
(a) If
α
= 1
/
3, then a 6% increase in labor results in a 2% increase in output.
FALSE: Use
the fact that
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '08
 Serra
 Economics, Microeconomics, Pk, 2%, Kyle F. Herkenhoﬀ∗, labor results

Click to edit the document details