The Productivity of a South American Country Is Given by the Function

question 27

Multiple Choice

The productivity of a South American country is given by the function when x units of labor and y units of capital are used.What is the marginal productivity of labor and what is the marginal productivity of capital when the amounts expended on labor and capital are 288 units and 18 units, respectively? Should the government encourage capital investment rather than increased expenditure on labor at this time in order to increase the country's productivity? Please answer yes or no.

• A)The marginal productivity of labor is 5.The marginal productivity of capital is 80.The government should have encouraged increased spending on capital rather than on labor.
• B)The marginal productivity of labor is 3.75.The marginal productivity of capital is 20.The government should not have encouraged increased spending on capital rather than on labor.
• C)The marginal productivity of labor is 3.75.The marginal productivity of capital is 20.The government should have encouraged increased spending on capital rather than on labor.
• D)The marginal productivity of labor is 5.The marginal productivity of capital is 80.The government should have encouraged increased spending on labor rather than on capital.

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Definitions:

Strategic Business Unit

A semi-autonomous division or unit within a company that focuses on a specific market or product line, with its own strategy and objectives.

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A group of individuals elected to represent shareholders and govern the activities of a corporation.

Government Agencies

Official organizations operated by the government to implement laws, provide services, and oversee various areas of public interest and policy.

Industry

A group of companies or businesses that produce or sell similar products or services.