Question

In a competitive economy, firms pay a real wage (W/P) equal to the marginal product of labor (MPL) and a real rental rate (R/P) equal to the marginal product of capital (MPK). Note that the total income of labor is equal to the product of the real wage and the total quantity of labor employed. Likewise, the total income of capital is equal to the product of the real rental rate and the total quantity of capital employed. Use this information to answer the following questions.

a. The marginal product of labor (MPL) can be expressed as______ and _______the marginal product of capital (MPK) can be expressed as _______.

Answer 1

hello your question has some missing information attached below is the missing information

answer :

MPL = ( 1 - ∝ ) Y/L

MPK = ( ∝ ) Y/K

Step-by-step explanation:

Given that : y = AK^∝ L^1-∝

The marginal product of labor can be expresses as :

MPL = dy/dL = AK^∝ ( 1 - ∝ ) L^ 1-∝-1

= ( 1 - ∝ ) [ A K^∝ L^-∝ ]

hence MPL = ( 1 - ∝ ) Y/L

The marginal product of capital can be expressed as :

MPK = A ∝ K^∝-1 L^ 1-∝

= ∝/K [ A k^∝ L^1-∝

= ∝/K * Y ∴ MPK = ( ∝ ) Y/K