-Based on the Table Above, Holding Capital Constant at 3

question 35

Multiple Choice

$$\begin{array} { | l | l | l | l | l | l | } \hline & \mathrm { K } = 0 & \mathrm {~K} = 1 & \mathrm {~K} = 2 & \mathrm {~K} = 3 & \mathrm {~K} = 4 \\\hline \mathrm { L } = 0 & 0 & 0 & 0 & 0 & 0 \\\hline \mathrm { L } = 1 & 0 & 1 & 2 & 3 & 4 \\\hline \mathrm { L } = 2 & 0 & 8 & 16 & 24 & 32 \\\hline \mathrm { L } = 3 & 0 & 27 & 54 & 81 & 108 \\\hline \mathrm { L } = 4 & 0 & 64 & 128 & 192 & 256 \\\hline\end{array}$$
-Based on the table above, holding capital constant at 3 units, the marginal productivity of the second laborer is

• A)8.
• B)12.
• C)21.
• D)24.

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Definitions:

Expected Dividend

The forecasted payment of dividends to shareholders, based on a company’s past dividend history and future earnings projections.

Semistrong Efficient

This term refers to a form of market efficiency that assumes all publicly available information is already reflected in stock prices, including historical and fundamental data.

Strong-Form Efficient

A state of market efficiency where all information, public and private, is accounted for in stock prices.

SML

Security Market Line, a graphical representation that shows the expected return of a security or portfolio as a function of its beta (systematic risk).