For an economy with a Cobb-Douglas production function in which labor receives 70% of national income and capital receives 30%,a 10% increase in total hours worked,holding all else constant

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In a Cobb-Douglas production function, the share of income going to labor and capital remains constant, meaning the distribution between labor and capital does not change with changes in the amount of labor or capital. A 10% increase in total hours worked, holding all else constant, increases the marginal product of capital because labor becomes relatively more abundant, making capital relatively scarcer and thus more productive. The shares of national income paid to labor and capital do not change due to the properties of the Cobb-Douglas production function, ruling out options A, C, D, and E.

For an Economy with a Cobb-Douglas Production Function in Which