Question
Suppose the production function for the country of Westlandia was: Q = K + L, where Q is the level of output, K the level
Suppose the production function for the country of Westlandia was: Q = K + L, where Q is the level of output, K the level of capital and L the level of labor. Which of the following statements is true about this production function:
a) Westlandia could achieve economic growth with labor alone.
b) Labor exhibits diminishing marginal returns
c) Capital exhibits diminishing marginal returns
d) All statements are true
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
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