If the production function describing an economy is Y = 100 K.25L.75, then the share of output going to labor:
A)is 25 percent.
B)is 75 percent.
C)depends on the quantities of labor and capital.
D)depends on the state of technology.

Question

Quizplus · Accepted Answer

The share of output going to labor is determined by the exponent on the labor input in the production function. In this case, the exponent on labor is .75, indicating that 75 percent of output goes to labor. It does not depend on the quantities of capital and labor or the state of technology.

If the Production Function Describing an Economy Is Y =