Answer to Question #109683 in Macroeconomics for Mia

Question

Consider the production function which satisfies the constant returns to scale. When K = 10, L = 5, H = 20, N = 30, and A = 1, the production level was 100. How much was the labor productivity? If K changed to 30, L changed to 15, H changed to 60 and N changed to 90 (and no change in A), how much would be the labor productivity after the change?

Labor productivity:

Labor productivity after the change:

Answer 1

Labor productivity is: $Q/L = 100/5 = 20$ units per worker.

Labor productivity after the change is the same, because the production function which satisfies the constant returns to scale, so it is 20 units of output per worker.