Consider the following production function . The level of technology in this economy is represented by a value of
A) 1.
B) 4.
C) 2.
D) 0.5.

Question

Consider the following production function . The level  of technology in this economy is represented by a value of
A) 1. 
B) 4. 
C) 2. 
D) 0.5.

Quizplus · Accepted Answer

The level of technology is represented by the exponent on the capital input in the production function. In this case, the exponent on capital is 0.5, which means the level of technology is √2, or approximately 1.41. Therefore, the answer is C).

Consider the Following Production Function