answesrtoquiz2spring2007

answesrtoquiz2spring2007 - Economics 302 Spring 2007...

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Economics 302 Name _____________________________________ Spring 2007 Answers to Quiz #2 Section Number ______________________________ The following quiz is worth a total of 2.5 points. If your work is illegible or sloppy points will be subtracted (.25 for marginally sloppy work, .5 for sloppy work, and 1 for unbearably sloppy work). 1. Suppose that the production function for an economy is given by Y = F (K, L) = A K ½ L ½ Where Y is output, A is the level of technology, K is capital and L is labor. a. (.25 points) If the value of A is 100, output is 5000 units, and there are 100 units of labor, what is the number of units of capital equal to in this economy? Show your work. Y = A K ½ L ½ , so 5000 = 100 K ½ (100) ½ . Simplifying this expression we get 5000 = 1000 K ½ , or K = 25 units. b. (.25 points) Given the values given part (a), what is output per worker? Y/L = 5000/100 = 50 units of output/worker c. (.25 points) Given the values given in part (a), what is output per unit of
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answesrtoquiz2spring2007 - Economics 302 Spring 2007...

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