Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Based on the info and answer to question 1
![**Essay Question 1(a)**
The aggregate production function is \( Y = 2KL \). There are 36 units of capital and 25 units of labor. What is the aggregate output?
**Solution:**
To calculate the aggregate output, substitute the given values into the production function:
\[
Y = 2KL
\]
Given:
- \( K = 36 \) (units of capital)
- \( L = 25 \) (units of labor)
Substitute these values into the equation:
\[
Y = 2 \times 36 \times 25
\]
Calculate the result:
\[
Y = 2 \times 900
\]
\[
Y = 1800
\]
Thus, the aggregate output is 1800 units.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F49529d2a-88a8-46ad-bbba-6d4044d677b4%2F0c6dd6de-f739-43fc-b251-c7de6321eb05%2Fcqdj7x_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Essay Question 1(a)**
The aggregate production function is \( Y = 2KL \). There are 36 units of capital and 25 units of labor. What is the aggregate output?
**Solution:**
To calculate the aggregate output, substitute the given values into the production function:
\[
Y = 2KL
\]
Given:
- \( K = 36 \) (units of capital)
- \( L = 25 \) (units of labor)
Substitute these values into the equation:
\[
Y = 2 \times 36 \times 25
\]
Calculate the result:
\[
Y = 2 \times 900
\]
\[
Y = 1800
\]
Thus, the aggregate output is 1800 units.
Expert Solution
Step 1
Given information:
Y = 2KL
Where Y is the aggregate output
K is capital
L is labor
-----------------------
There are 36 units of capital and 25 units of labor.
i.e., K =36 and L = 25
-----------------------
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