Consider a production function Y=zF(K,Nd) Which of the following properties we assume for F? 1. Constant...

Consider a production function Y=zF(K,N^d)

Which of the following properties we assume for F?

1. Constant returns to scale.

2. Output increases with increases in either the labor input or the capital input

3. The marginal product of labor decreases as the labor input increases.

4. The marginal product of capital decreases as the capital input increases.

5. The marginal product of labor increases as the quantity of the capital input increases.

a) 1,2,3,4,5

b) 1,2,3

c) 1 and 2

Expert Solution

ANSWER:

a) 1,2,3,4,5

Let's Consider, which is generally used as a production function in macroeconomic models.

It has a Constant return to scale, Output increases with increases in either the labor input or the capital input, the marginal product of labor decreases as the labor input increases, the marginal product of capital decreases as the capital input increases, the marginal product of labor increases as the quantity of the capital input increases.

Rahul Sunny answered 2 years ago

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