The aggregate production function is Y = 5K^0.5^L^0.5. If there are 49 units of capital and 16 units of labor, aggregate output is A) 60 units. B) 70 units. C) 140 units. D) 325 units.

Question

Quizplus · Accepted Answer

Substituting the given values, we get 
Y = 5 x (49)^(1) x (16)^(1) x (1)^(10.5) x (1)^(0) x (1)^(1) x (1)^(0) x (1)^(10.5) x (1)^(0.5) x (1)^(0)
Y = 5 x 49 x 16 x 1 x 1 x 1 x 1 x 1 x 1.2247 x 1
Y = 140
Therefore, aggregate output is 140 units.

The Aggregate Production Function Is Y = 5K0

The Aggregate Production Function Is Y = 5K⁰