In a production function where capital (K)is raised to the power 0.3 and labour (N)is raised to the power 0.7
A)the production function relating output and labour is not as sharply bowed as the production function relating output and capital.
B)the production function relating output and labour is as sharply bowed as the production function relating output and capital.
C)the production function relating output and capital is not as sharply bowed as the production function relating output and labour.
D)the production function relating output and capital is bowed,but the production function relating output and labour is not bowed.

Question

Quizplus · Accepted Answer

In a production function where capital is raised to the power of 0.3 and labour is raised to the power of 0.7, the marginal product of labour decreases at a slower rate than the marginal product of capital as more units of each factor are added. This means that the production function relating output and labour is not as sharply bowed as the production function relating output and capital. Hence, choice A is the best answer.

In a Production Function Where Capital (K)is Raised to the Power