15. For this question use this aggregate production function as a model of output. Y = Ax VK x VI The marginal product of capital can be defined as the extra output (Y) that would be produced if you increased the capital (K) by one unit. For simplicity assume A = L = 1. Fill in the MPK for each level of capital in the table. K MPK 1 4 What do you notice about the MPK as K increases while Land A are held fixed? a. it gets smaller and smaller b. it gets larger and larger c. it stays the same without any change d. it goes down and then back up
15. For this question use this aggregate production function as a model of output. Y = Ax VK x VI The marginal product of capital can be defined as the extra output (Y) that would be produced if you increased the capital (K) by one unit. For simplicity assume A = L = 1. Fill in the MPK for each level of capital in the table. K MPK 1 4 What do you notice about the MPK as K increases while Land A are held fixed? a. it gets smaller and smaller b. it gets larger and larger c. it stays the same without any change d. it goes down and then back up
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:15. For this question use this aggregate production function as a model of output.
Y = A × VK × vī
The marginal product of capital can be defined as the extra output (Y) that would be produced if you
increased the capital (K) by one unit. For simplicity assume A = L = 1. Fill in the MPK for each level of
capital in the table.
K
MPK
1
4
What do you notice about the MPK as K increases while Land A are held fixed?
a. it gets smaller and smaller
b. it gets larger and larger
c. it stays the same without any change
d. it goes down and then back up
Expert Solution
Step 1
The link between the number of productive inputs (such as labour and capital) used and the amount of output obtained is expressed by the production function in economics. It specifies the amount of product that may be obtained from any given set of circumstances, providing that the most efficient production methods are employed.
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