Consider the Cobb-Douglas production function , , where is output produced with capital and labour . Assuming is a positive constant, identify the CORRECT statement(s).
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2 marksMicroeconomicsProduction and returns to scaleProduction function, marginal and average productModerateabout 2 min
IIT JAM 2026 Question 37: Production and returns to scale
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Consider the Cobb-Douglas production function Q(K,L)=AK⁰·⁵L⁰·⁵, A>0, where Q is output produced with capital K and labour L. Assuming K is a positive constant, identify the CORRECT statement(s). (A) (∂ Q)/(∂ L) increases as L increases. (B) (∂ Q)/(∂ L) decreases as L increases. (C) As L increases, Q increases but at a slower rate. (D) As L increases, Q decreases but at a slower rate.
Also written as: Consider the Cobb-Douglas production function Q(K,L)=AK^(0.5)L^(0.5), A>0, where Q is output produced with capital K and labour L. Assuming K is a positive constant, identify the CORRECT statement(s).
Production and returns to scale has come up 92 times in 6 exams since 2007.
What this question tests
This question is on Production function, marginal and average product, part of Production and returns to scale in Microeconomics.
How output depends on inputs, and the law of diminishing returns to a variable factor.
TestStop has 16 past-paper questions on this subtopic.
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Question from the IIT JAM 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.