Question

(Preferred for the answer to be graphed on a cartesian plane)

The Cobb-Douglas function for a new product is given by Y(K,L) = 5K^0.4L^0.6 Where K is the number of units of capital and L is the number of units of labour required to produce units of the product. B1. In space, where capital is on horizontal axis ranging from 0 to 15 and labour is on the vertical axis ranging from 0 to 15, depict all possible combinations of and resulting in production levels of 10, 20, 30, 40 and 50 units. In a single graph you should have five curves (one for each production level).

Answer 1

Here, we are given the Cobb-Douglas function for a new product given by Y (K, L) = 5K0.4L0.6 where, K is the number of units of Capital and L is the number of units of labour required to produce each unit of the new product.

We plot a graph depicting all combinations of and resulting in production levels of 10, 20, 30, 40, and 50.
Red plot-line:   10 = 5K^0.4L^0.6
Blue plot-line:   20 = 5K^0.4L^0.6
Green plot-line: 30 = 5K^0.4L^0.6
Orange plot-line: 40 = 5K^0.4L^0.6
Purple plot-line: 50 = 5K^0.4L^0.6