When a production function can be expressed as $Q = ( a K ) ( b L )$ , the relationship between capital and labor in the production function is that
A) capital and labor are perfect substitutes, and the isoquants are linear.
B) capital and labor must be combined in fixed proportions, and the isoquants are L-shaped.
C) capital and labor are substitutable, and the isoquants are convex to the origin.
D) capital and labor are perfect substitutes, and the isoquants are L-shaped.

Question

Quizplus · Accepted Answer

The given production function is a Cobb-Douglas type, where capital (K) and labor (L) are substitutable, and the isoquants are typically convex to the origin, indicating diminishing marginal rates of technical substitution.

When a Production Function Can Be Expressed As Q=(aK)(bL)Q = ( a K ) ( b L )Q=(aK)(bL)

When a Production Function Can Be Expressed As $Q = ( a K ) ( b L )$