Suppose the current level of output is 5000. If the elasticities of output with respect to capital and
labor are 0.3 and 0.7, respectively, a 10% increase in capital combined with a 5% increase in labor
and a 5% increase in productivity would increase the current level of output to
(a) 5015.
(b) 5325.
(c) 5575.
(d) 6000.
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