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The petroleum company in Problem is taken over by another company that decides to double both the units of labor and the units of capital utilized in the production of petroleum.
Use the Cobb Douglas production function given in Problem to find the amount of petroleum that will be produced by this increased utilization of labor and capital. What is the effect on productivity of doubling both the units of labor and the units of capital?
ProblemThe Cobb Douglas production function for a petroleum company is given by
where x is the utilization of labor and y is the utilization of capital. If the company uses 1,250 units of labor and 1,700 units of capital, how many units of petroleum will be produced?
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