In the production function, Y = zF(K, N^d), total factor productivity is A) Y/K. B) Y/ N^d. C) F/Y. D) z. E) Y/Z.

Question

Quizplus · Accepted Answer

Total factor productivity (TFP) is represented by the constant factor z in the production function Y = zF(K, N^d), thus option D is the correct answer. Option A is incorrect because Y/K represents capital productivity, while option B represents labor and material productivity. Option C is incorrect because F/Y represents the inverse of TFP, which is not relevant in this case. Option E is incorrect because Y/Z is not a valid formula in this context.

In the Production Function, Y = ZF(K, Nd), Total Factor

In the Production Function, Y = ZF(K, N^d), Total Factor