Saksham , an industrialist, has Rs. 30 as capital, 25 workers as labour, total factor productivity is constant at 0.4, output elasticity of labour is 0.3 and output elasticity of capital is 0.7, then what will be production function in the form of Cobb-Douglas.
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Saksham, an industrialist, has Rs. 30 as capital, 25 workers as labour, total factor productivity is constant at 0.4, output elasticity of labour is 0.3 and output elasticity of capital is 0.7, then what will be production function in the form of Cobb-Douglas. (A) Q = 0.8*30⁰·⁴*25⁰·⁶ (B) Q = 0.9*30⁰·⁴*25⁰·⁶ (C) Q = 0.7*30⁰·⁴*25⁰·⁶ (D) Q = 0.4*25⁰·³*30⁰·⁷
Production and returns to scale has come up 92 times in 6 exams since 2007.
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.
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Question from the JNU SSS 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.