A Cobb-Douglas production function with inputs capital and labor is homogeneous of degree 1 and has output elasticity of capital equal to 0·4. If the marginal product of labor is 15 at a value of the capital-labor ratio equal to 20, what is the average product of labor at the same value of the capital-labor ratio?
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Production and returns to scale has come up 92 times in 6 exams since 2007.
This question is on Production function, marginal and average product, part of Production and returns to scale in Microeconomics.
How output depends on inputs, and the law of diminishing returns to a variable factor.
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Question from the JNU SSS 2018 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.