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Name ________________________________________
Summer2007
Second Quiz
Student ID Number _____________________________
The following quiz is worth a total of 2.5 points. If your work is sloppy or illegible points
will be subtracted.
1.
Suppose that the production function for an economy is given by
Y = F(K,L) = AK
1/2
L
1/2
Where Y is output, A is the level of technology, K is capital and L is labor.
a.
(.25 points) If the value of L is 400, the value of K is 625, and the value of
A is 2, what is the value of output in this economy? Show your work.
b.
(.25 points) Given the values in part (a), calculate capital productivity.
Show your work. Be sure to show the relevant units of measurement in
your answer.
c.
(.25 points) If labor and technology are held constant, but capital is
increased to 900 units, what happens to capital productivity? Verbally
describe the effect of this change on capital productivity.
1
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 Spring '07
 GOLD
 Economics, Macroeconomics

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