Use the production function: output = A × (L + K + H + N). If there are two units of land, two units of human capital, three units of natural resources, five units of physical capital, and technology value of three, what is the output that can be produced?

Question

Quizplus · Accepted Answer

The production function is output = A × (L + K + H + N). Substituting the given values: A = 3, L = 0, K = 5, H = 2, N = 3. Therefore, output = 3 × (0 + 5 + 2 + 3) = 3 × 10 = 30. However, the correct calculation should be 3 × (2 + 5 + 2 + 3) = 3 × 12 = 36.

Use the Production Function: Output = a × (L