If Y = AK0.5L0.5 and A, K, and L are all 100, the marginal product of capital is:
A)50.
B)100.
C)200.
D)1,000.

Name: If Y = AK0.5L0.5 and A, K, and L are all 100, the marginal product of capital is: A)50. B)100. C)200. D)1,000.
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Question

Quizplus · Accepted Answer

The marginal product of capital (MPK) is the derivative of the production function with respect to K. For Y = AK^0.5L^0.5, MPK = 0.5A(K^-0.5)L^0.5. Substituting A = 100, K = 100, and L = 100, MPK = 0.5 * 100 * (100^-0.5) * (100^0.5) = 50.