The economy's output is produced using function Y = AK^0.2N^0.8. Suppose that K = 1000, N =100,

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The economy's output is produced using function Y = AK^0.2N^0.8.

Suppose that K = 1000, N =100, and A =2, then Y = 317.

If the total productivity increases by 10 %, and K decreases by 10 %, by how many percentage points (rounded) does Y change?

a. 0%

b. -1%
C. 8%
d. 10%

Related Book For answer-question

Microeconomics Theory and Applications with Calculus

ISBN: 978-0133019933

3rd edition

Authors: Jeffrey M. Perloff

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Posted Date: Mar 27, 2024 05:03 AM

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The economy's output is produced using function Y = AK^0.2N^0.8. Suppose that K = 1000, N =100,

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Microeconomics Theory and Applications with Calculus

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