If output is exhausted by the distributive shares of all factors:
A)euler theorem
B)output elasticity
C)labour share
D)none

Question

Quizplus · Accepted Answer

Euler's theorem states that if the production function is homogeneous of degree one (linearly homogeneous), then the output is exactly exhausted by the payments to all factors of production. This means that the sum of the distributive shares (like wages for labor, rent for land, interest for capital) equals the total output.

If Output Is Exhausted by the Distributive Shares of All