The aggregate production function is Y = 5K0.5L0.5. If there are 49 units of capital and 16 units of labor, aggregate output isGroup of answer choices60 units70 units.140 units.325 units.
Question
The aggregate production function is Y = 5K0.5L0.5. If there are 49 units of capital and 16 units of labor, aggregate output isGroup of answer choices60 units70 units.140 units.325 units.
Solution
To find the aggregate output, we need to substitute the given values of capital (K) and labor (L) into the aggregate production function.
The aggregate production function is given as Y = 5K^0.5L^0.5.
Given, K = 49 and L = 16.
Substituting these values into the function, we get:
Y = 5 * (49)^0.5 * (16)^0.5
First, calculate the square root of 49 and 16, which are 7 and 4 respectively.
So, Y = 5 * 7 * 4
Then, multiply these values together.
Y = 5 * 7 * 4 = 140 units.
So, the aggregate output is 140 units.
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