In the production function Y = A • F(K,L), L is:
A)leisure.
B)labour.
C)the marginal product of labour.
D)the marginal product of leisure.

Question

Quizplus · Accepted Answer

In the production function Y = A • F(K,L), L represents labour as it is an input in the production process. A represents total factor productivity and K represents capital. The marginal product of labour is not explicitly mentioned in the production function and the concept of leisure is not relevant to the production function. Therefore, the best choice is B – labour.

In the Production Function Y = a • F(K,L), L