Matching Pairs ECON 315- SI Online version Activity trail by Vy Do 1 the labor and capital can be substituted for each other, within limit 2 A firm incrementally increases its use of one input and the addition to output decreases 3 Q= 10L^0.3K^0.5 4 A firm increases its use of 1 unit incrementally and the addition to output increases 5 Q = min{ 5K, 3L} 6 the labor and capital cannot be substituted for each other 7 IF MPL/w > MPK/r 8 It’s possible for a firm’s output to be produced with the use of only 1 input 9 MPK * Price of Output 10 keep on using additional units of an input as long as the added benefit is at least as large as the added cost 11 Q= 5K + 3L 12 Q/L An example of Linear Production Function use more LABOR Law of Diminishing Marginal Returns Leontieff function linear production function An example of COBB-DOUGLAS Optimal input rule Increasing Marginal Returns An example of Leontieff COBB-Douglas VMPK APL
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