- #1
albert2008
- 12
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Dear People,
This is Production Function and it comes from my economics book. The equation is saying that output per worker (Y/L) is equal to capital per worker (K/L) times the efficiency of labor (E) where alpha is a parameter between zero and one. The chapter is explaining the equation. I don't understand the concept (math) of how the books gets to
(Y/L)1-α= (K/L)α (E)1-α
after it divides both sides by (Y/L)α
Thanks so much and I hope this makes sense
α=alpha (superscript)
1-α=1 minus alpha (superscript)
Y/L=(K/L)α (E)1-α
Rewrite K/L as (K/Y) times (Y/L)
Y/L=(K/Y)α (Y/L)α (E)1-α
Divide both sides by (Y/L)α
(Y/L)1-α= (K/L)α (E)1-α -->Please can someone help me
understand how you get (Y/L)1-α
I don’t understand the logic. Does it have to do with power rule?.
This is Production Function and it comes from my economics book. The equation is saying that output per worker (Y/L) is equal to capital per worker (K/L) times the efficiency of labor (E) where alpha is a parameter between zero and one. The chapter is explaining the equation. I don't understand the concept (math) of how the books gets to
(Y/L)1-α= (K/L)α (E)1-α
after it divides both sides by (Y/L)α
Thanks so much and I hope this makes sense
α=alpha (superscript)
1-α=1 minus alpha (superscript)
Y/L=(K/L)α (E)1-α
Rewrite K/L as (K/Y) times (Y/L)
Y/L=(K/Y)α (Y/L)α (E)1-α
Divide both sides by (Y/L)α
(Y/L)1-α= (K/L)α (E)1-α -->Please can someone help me
understand how you get (Y/L)1-α
I don’t understand the logic. Does it have to do with power rule?.
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