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

Question

Quizplus · Accepted Answer

In the Cobb-Douglas production function, a higher value of the parameter E (which typically represents total factor productivity) means that for any given amount of capital per worker, the economy can produce more output per worker. This parameter reflects the efficiency with which inputs are transformed into outputs.

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