A type of production function that includes linear production functions, fixed-proportions production functions, and Cobb-Douglas production functions as special cases is:
A)Cobb-Douglas production function
B)Constant elasticity of substitution (CES)production function
C)Fixed proportions production functions
D)Linear production functions

Question

Quizplus · Accepted Answer

The Constant elasticity of substitution (CES) production function is a general type of production function that includes linear production functions, fixed-proportions production functions, and Cobb-Douglas production functions as special cases. The CES production function allows for varying degrees of substitution between inputs, which makes it a more flexible and realistic production function for many industries than the other options listed. The Constant elasticity of substitution (CES) production function includes linear and fixed-proportions production functions as special cases, and the Cobb-Douglas production function is also a special case of the CES production function. Therefore, the best choice is B.

A Type of Production Function That Includes Linear Production Functions