Question
An economy is described by the following production function: = where Y is the output (real GDP), K is the amount of capital, N is
An economy is described by the following production function:
=
where Y is the output (real GDP), K is the amount of capital, N is labour (number of workers), and A is the total factor productivity.
a. Does it exhibit the diminishing marginal product of capital? Explain. (2)
b. Does it exhibit the constant returns to scale? Explain
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Microeconomics
Authors: Roger A. Arnold
12th Edition
1285738306, 978-1285738307
