The parameter E in the Cobb-Douglas production function
A) tells us the current level of the efficiency of labor.
B) tells us the current level of the efficacy of labor.
C) tells us the current level of capital stock per worker.
D) tells us the current level of the efficiency of capital.

Question

Quizplus · Accepted Answer

The parameter E in the Cobb-Douglas production function represents the efficiency of labor, indicating how effectively labor is being utilized in the production process.

The Parameter E in the Cobb-Douglas Production Function