Given the Production Function Y = AK0

question 18

Multiple Choice

Given the production function Y = AK0.3L0.7, if an economy's capital per worker k is $27 thousand, and its total factor productivity A is 0.5, then output per worker is (approximately) ________.

• A) $13,500
• B) $40,500
• C) $3,000
• D) $5,000
• E) $1,500

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Definitions:

Minimum Price

A price floor set by the government or a body, below which the product cannot be sold, aimed at protecting producers or farmers.

Government

is the system or group of people governing an organized community, often a state, which creates and enforces laws, regulates economic and social policies, and provides public services.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, intended to prevent prices from reaching levels thought to be unfair or unaffordable.

Government

The organization, apparatus, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.