Suppose the aggregate production function is given by the following: Y = AN.Given this information,we know that labor productivity is represented by the following:

Question

Quizplus · Accepted Answer

Labor productivity is defined as output per unit of labor input. In this formula, Y represents output (total production), while N represents labor input. Therefore, labor productivity can be calculated by dividing Y by N. However, we also know that Y = AN. Substituting AN for Y, we get labor productivity = AN/N = A. Therefore, the correct choice is B.

Suppose the Aggregate Production Function Is Given by the Following