A production function of the form $Q = A L ^ { a } K ^ { \beta }$ is a(n)
A) isoquant function
B) Cobb-Douglas production function
C) fixed-proportions function
D) perfect complements function

Question

Quizplus · Accepted Answer

The production function given is a Cobb-Douglas production function, which is a commonly used functional form in economics to represent production processes. It has the form Q = A L^a K^β, where Q is the quantity of output produced, L is the amount of labor input, K is the amount of capital input, A is a constant factor representing the level of technology, and a and β are coefficients representing the elasticity of output with respect to changes in labor and capital inputs. The Cobb-Douglas production function is widely used because it has several desirable properties, such as constant returns to scale, elasticity of substitution between inputs, and tractability for empirical estimation.

A Production Function of the Form Q=ALaKβQ = A L ^ { a } K ^ { \beta }Q=ALaKβ

A Production Function of the Form $Q = A L ^ { a } K ^ { \beta }$