Which of the following equations based on capital (K) and labor (L) inputs does not represent a plausible production function? A) F(K,L) = 3KL B) F(K,L) = 3K C) F(K,L) = K + L - 1 D) F(K,L) = 10(KL)^0.5

Question

Quizplus · Accepted Answer

The production function F(K,L) = K + L - 1 is not plausible because it does not satisfy the property of increasing marginal productivity. As K and L increase, the marginal product of each input should increase, but in this case, the marginal product of both K and L is constant at 1.

Which of the Following Equations Based on Capital (K) and Labor