If the parameter E of the Cobb-Douglas production function has a low value
A) the economy is very productive.
B) more output per worker can be produced for each possible value of the capital stock per worker.
C) less output per worker can be produced for each possible value of the capital stock per worker.
D) the value of capital per worker is low.

Question

Quizplus · Accepted Answer

The parameter E in the Cobb-Douglas production function represents the efficiency of labor. A low value of E indicates that the economy is less efficient at turning labor and capital into output, meaning less output per worker can be produced for each possible value of the capital stock per worker.

If the Parameter E of the Cobb-Douglas Production Function Has