The two main inputs we consider in a simple production function are:
A) land and labor.
B) capital and land.
C) capital and labor.
D) utilities and capital.
E) natural resources and labor.

Question

Quizplus · Accepted Answer

The two main inputs in a simple production function are capital and labor, as stated by the Cobb-Douglas production function, which takes the generalized form of Y = A(K^α)(L^1-α), where Y is the output, A is the level of technology, K is the capital input, L is the labor input, and α is the share of output attributed to capital (and 1-α is attributed to labor). Therefore, the correct answer is C, capital and labor.

The Two Main Inputs We Consider in a Simple Production