Suppose that the production function for the economy is: Y = AK¹/⁴ᴸ³/⁴.Assume that A = 1000,the current capital stock is $32 000 billion,and the labour force is 120 million (or 0.120 billion)workers.All else equal,if the capital stock increases by $8000,the value of the marginal product of labour will be

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Quizplus · Accepted Answer

The value of the marginal product of labor is equal to the change in output divided by the change in labor. In this case, the change in output is equal to the derivative of the production function with respect to labor, which is:```dY/dL = (3/4) * (1000) * (K^(1/4)) * (L^(-1/4))```Plugging in the values for A, K, and L, we get:```dY/dL = (3/4) * (1000) * (32000^(1/4)) * (0.120^(-1/4)) = $18,021.09```Therefore, the correct answer is A.

Suppose That the Production Function for the Economy Is: Y