Question

*Please explain why* If the marginal product of capital doesn’t change as the amount of capital...

*Please explain why*

If the marginal product of capital doesn’t change as the amount of capital increases, but production increases, then a plot of the production function, showing output as a function of capital,

A. is a vertical line.

B. is a straight line with a slope of zero.

C. is a straight line with constant upward slope.

D. slopes upward with a slope that declines as the amount of capital increases.

Homework Answers

Answer #1

Ans) C is the correct option. is a straight line with constant upward slope. Marginal product of capital is the additional output from the use of additional capital. marginal product of capital is constant so equal to the average product of capital. This reflects that the total product will be a straight line with upward slope because the production or the output is increasing. The reciprocal of the marginal product of capital is the incremental capital output ratio.

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