Suppose the aggregate production function is represented by Y = AN. Which of the following expressions represents the number of additional workers required to increase production by one unit?
A) 1/A.
B) 1/N.
C) 1/Y.
D) A.
E) Y/N.

Question

Quizplus · Accepted Answer

Given the production function Y = AN, the marginal product of labor (MPL) is A, meaning that each additional worker increases output by A units. To increase production by one unit, 1/A workers are needed, as 1 = A*(1/A).

Suppose the Aggregate Production Function Is Represented by Y =