Suppose that the production function for the economy is: Y = AK¹/⁴ᴸ³/⁴.Assume that A = 1000,the capital stock is $32 000 billion,and the labour force is 120 million (or 0.120 billion)workers.The value of the marginal product of capital is

Question

Quizplus · Accepted Answer

To calculate the marginal product of capital (MPK), we need to take the partial derivative of the production function with respect to K:

MPK = (1/4)AK^(-3/4)L^(3/4)

Substituting the given values, we get:

MPK = (1/4)*(1000)*(32,000/0.120)^(-3/4)*(0.120)^(3/4)

MPK ≈ $0.0213

Therefore, the answer is B.

Suppose That the Production Function for the Economy Is: Y