With a Cobb-Douglas production function, the share of output going to labour:
A)decreases as the amount of labour increases.
B)increases as the amount of labour increases.
C)increases as the amount of capital increases.
D)does not depend on the amount of labour in the economy.

Question

Quizplus · Accepted Answer

In a Cobb-Douglas production function, the share of output going to labor is constant and determined by the exponent on labor in the function, regardless of the amount of labor or capital.

With a Cobb-Douglas Production Function, the Share of Output Going