In the Cobb-Douglas production function $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$ , labor's share of GDP is:
A) two-thirds, regardless of how much labor there is
B) two-thirds but can change as more laborers are added
C) one-third, regardless of how much labor there is
D) always equal to one
E) Not enough information is given.

Question

Quizplus · Accepted Answer

In the Cobb-Douglas production function $Y = K^{1/3} L^{2/3}$, the exponent of labor (L) is 2/3, which represents labor's share of GDP. This share is constant at two-thirds, regardless of the amount of labor.

In the Cobb-Douglas Production Function Y=K1/3L2/3Y = K ^ { 1 / 3 } L ^ { 2 / 3 }Y=K1/3L2/3

In the Cobb-Douglas Production Function $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$