Suppose the economy's production function is Y = AK^0.3^N^0.7^.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase? A)5% B)10% C)15% D)20%

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Quizplus · Accepted Answer

The production function exhibits constant returns to scale, so a 5% increase in both K and N results in a 5% increase in Y.

Suppose the Economy's Production Function Is Y = AK0

Suppose the Economy's Production Function Is Y = AK⁰