Long Run Growth

Question 1

Labour Productivity

Answer 1

Output/population = output/employment × employment/population

Question 2

Aggregate Production Function

Answer 2

Y = A × Fn(K,L)

Question 3

Cobb Douglas Production Function

Answer 3

Y = A × KᵅL¹ˉᵅ

Question 4

Properties of Cobb Douglas Production Function

Answer 4

o Positive marginal products
o Diminishing returns to each input
o Constant returns to scale

Question 5

Marginal Product

Answer 5

The amount of extra output from adding a small amount of that input, holding all other inputs fixed