Wednesday
July 23, 2014

Homework Help: Macroeconomics

Posted by joe on Thursday, February 8, 2007 at 9:55am.

Economists have found that a good approximation of value added production fucntion is given by Y=TFP*(K^alpha)*(L^-alpha)
TFP is Total factor Productivity
K is capital stock
L is quantity of labor used
alpha is a paramater around 1/3.
How is value added defined? Why dont intermediate inputs enter this production function?

I presume the exponent on L is (1-alpha). This would make your production function a Cobb-Douglas -- very traditional in econ literature.

Value added is defined by your value added fuction which is determined by a mix of labor and capital inputs.

I'm not sure what you mean by your second question. Are intermediate inputs embodied in your K capital input?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Macroeconomics - Manipulation of the Cobb Douglas Equation gives us expression ...
trig - FInd the exact value pf the 6 trig function of alpha Given: point (-2,-6...
Math ( Polynomial ) - This time three questions - 1. If (x^2 - 1 ) is a factor ...
Math ( Polynomial ) - This time three questions - 1. If (x^2 - 1 ) is a factor ...
STOCKS & BONDS - Alpha Corporation has outstanding an issue of preferred stock ...
precal - when solving for all solutions how do I work out this problem: cos4(...
trig - express 20sin theta + 4 cos theta as R sin(theta + alpha) R sin(theta + ...
maths - Given that the roots of 2x^2-4x+5 are alpha and beta,find the value of...
another college math question - Please teach me. I am completely blank with it...
Trigonometry - Find the exactly value of sin2(alpha) if cos(alpha) = 4/5 (alpha ...

Search
Members