16. (continued) What if the TEP increases? Fill in the table below to study that. What best describes the MPKS in the higher TFP column? K MPK for TFP = 1 MPK for TFP = 2 1 4 9. a. the MPKS are all higher
16. (continued) What if the TEP increases? Fill in the table below to study that. What best describes the MPKS in the higher TFP column? K MPK for TFP = 1 MPK for TFP = 2 1 4 9. a. the MPKS are all higher
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
15 is B, answer 16 only

Transcribed Image Text:a negative sign to indicate that.)
15. For this question use this aggregate production function as a model of output.
Y = A x 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
9.
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

Transcribed Image Text:16. (continued) What if the TEP increases? Fill in the table below to study that. What best describes the
MPKS in the higher TFP column?
K
MPK for TFP = 1
MPK for TFP = 2
4
9.
a. the MPKS are all higher
b. the MPKS are all lower
C. some of them are higher and some are lower
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