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Questions › IIT JAM › IIT JAM 2024 › Q3
1 mark, −0.333Microeconomics › Production and returns to scale › Production functions and the elasticity of substitutionModerateabout 2 min

IIT JAM 2024 Question 3: Production and returns to scale

Consider a production function of the form: Y=alog⁡L+(1−a)log⁡KY = a \log L + (1-a) \log KY=alogL+(1−a)logK, a∈(0,1)a \in (0,1)a∈(0,1), a≠0.5a \neq 0.5a=0.5, where YYY is output, LLL is labour, and KKK is capital. Then, the absolute value of elasticity of substitution is

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Consider a production function of the form: Y = a log L + (1-a) log K, a ∈ (0,1), a ≠ 0.5, where Y is output, L is labour, and K is capital. Then, the absolute value of elasticity of substitution is (A) 1 (B) a (C) (1-a) (D) ∞

Also written as: Consider a production function of the form: Y = a log L + (1-a) log K, a in (0,1), a != 0.5, where Y is output, L is labour, and K is capital. Then, the absolute value of elasticity of substitution is

Production and returns to scale has come up 92 times in 6 exams since 2007.

What this question tests

This question is on Production functions and the elasticity of substitution, part of Production and returns to scale in Microeconomics.

Cobb-Douglas, CES and fixed-proportions technologies, and how easily inputs substitute.

TestStop has 16 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2022 · Q23Let a production function be log Q = β/αlog (L^α + K^α), where α ∈ (-∞, 1] - {0} and β > 0. Identify the…
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Question from the IIT JAM 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.