Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4. A 10% increase in capital would increase the current level of output to
a. 5050.
b. 5500.
c. 5200.
d. 5020.
Answer: C
Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4. A 10% increase in capital would increase the current level of output to
a. 5050.
b. 5500.
c. 5200.
d. 5020.
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