Assume an aggregate production function where Y=(L^0.6)*(K^0.4). Then it must be true that. O a. the share of capital income in total income is 40%. O b. increasing the ratio of capital to labor will reduce the marginal productivity of labor. O C. the production function exhibits increasing returns to scale.

Assume an aggregate production function where Y=(L^0.6)*(K^0.4). Then it must be true that. O a. the share of capital income in total income is 40%. O b. increasing the ratio of capital to labor will reduce the marginal productivity of labor. O C. the production function exhibits increasing returns to scale.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 7E

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