Question
The economy's output is produced using function Y = AK^0.2N^0.8. Suppose that K = 1000, N =100, and A =2, then Y = 317. If
The economy's output is produced using function Y = AK^0.2N^0.8.
Suppose that K = 1000, N =100, and A =2, then Y = 317.
If the total productivity increases by 10 %, and K decreases by 10 %, by how many percentage points (rounded) does Y change?
a. 0%
b. -1%
C. 8%
d. 10%
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Microeconomics Theory and Applications with Calculus
Authors: Jeffrey M. Perloff
3rd edition
133019934, 978-0133019933
