What do we learn from the shape of the Cobb-Douglas production function?
A)its slope falls as capital gets added
B)the marginal product of capital declines as the capital stock increases
C)there are diminishing returns to capital
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The shape of the Cobb-Douglas production function shows that there are diminishing returns to capital, which means that the marginal product of capital declines as the capital stock increases. This is represented by a slope that falls as more capital is added. Therefore, answer D - "all of the above" - is the best choice.

What Do We Learn from the Shape of the Cobb-Douglas