The per person production function representing both physical capital per person (K/N)and human capital per person (H/N)is
A)Y/N = (K/N)b(H/N)c.
B)Y/N = (K/N)b + (H/N)c.
C)Y/N = (K/N)b - (H/N)c.
D)Y/N = (K/N)b/(H/N)c.

Question

Quizplus · Accepted Answer

The question states that the production function represents both physical capital and human capital per person, which suggests that the two factors should be multiplied together in some way. Option A, Y/N = (K/N)b(H/N)c, represents a production function that is a Cobb-Douglas function that incorporates both physical capital and human capital. Option B only adds the two terms, which is not an accurate representation of the relationship between physical and human capital in production. Option C subtracts the two terms, which is also not accurate. Option D divides the two terms, which could be a possible production function, but there is no clear reason why human capital should be in the denominator while physical capital is in the numerator. Therefore, the best choice is A.

The Per Person Production Function Representing Both Physical Capital Per