In the production function Y = AF(K,N),A is
A)labour productivity.
B)total factor productivity.
C)capital productivity.
D)the marginal productivity of capital.

Question

Quizplus · Accepted Answer

A stands for total factor productivity (TFP), which is a measure of the efficiency of production that is not explained by the inputs of capital and labor alone. TFP is the measure of the output produced by a combination of inputs, such as technology, skills, education, and other factors. Therefore, option B is the correct choice. Option A is incorrect because labour productivity refers only to the efficiency of labor in producing output. Option C is incorrect because capital productivity is a measure of the output produced by a unit of capital input alone. Option D is incorrect because the marginal productivity of capital refers to the additional output produced by an additional unit of capital input, rather than a measure of TFP.

In the Production Function Y = AF(K,N),A Is