# Solow Model

1. Verify that, for the neoclassical production function, the marginal product of capital and the marginalproduct of labor are in fact given by (respectively),

âˆ‚Y/âˆ‚K =f'(K)

and

âˆ‚Y/âˆ‚L= f(k)- kf'(K)

(Minimum requirement: a serious attempt at deriving these expressions.)

the professor gave as a clue to keep in mind this function.

Y/K= f(K)= f(K/L)

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#### Solution Preview

Begin with the neoclassical production function:

(1) Y=f(K,L)

Where Y is output, K is capital, and L is labor.

Equation (1) exhibits three notable features. First, the marginal products of K and L are positive. That is, âˆ‚Y/âˆ‚K>0 and âˆ‚Y/âˆ‚L>0. An increase in K or L increases Y. The second derivatives are less than zero( âˆ‚2Y/âˆ‚K2<0 and âˆ‚2Y/âˆ‚L2<0)[Note: the 2's ...

#### Solution Summary

Solow Model is utilized for neoclassical production. The expressions are derived.