ECON 309 (Tan): PROBLEM SET 2
Deadline: 11:59 PM CST, February 6, 2023.
1. Assume the economy's production function is:
Y = 10\sqrt{KL}
a. Is this a Cobb-Douglas production function? If so, what is \alpha?
b. Fill in the table below.
\begin{tabular}{|c|c|c|}
\hline
L & K & Y \\
\hline
250 & 160 & \\
251 & 160 & \\
275 & 160 & 2200 \\
\hline
\end{tabular}
c. Using the first and second rows of numbers from your completed table, calculate the
(approximate) value of the MPL that corresponds to the increase in L from 250 to 251.
Then calculate the MPL at L = 250 using the equation from the textbook (see, page 58).
d. The production function we're using is a constant returns-to-scale (CRS) production
function. Using the first and third rows of numbers from your completed table, verify
that there are constant returns to scale.