In the Cobb-Douglas production function the $\alpha$represents:
A) total income.
B) the share of production contributed by labor.
C) the total amount of capital in an economy.
D) the total demand for capital in an economy.
E) the share of production contributed by capital.

Question

In the Cobb-Douglas production function  the $\alpha$represents:
A) total income. 
B) the share of production contributed by labor. 
C) the total amount of capital in an economy. 
D) the total demand for capital in an economy. 
E) the share of production contributed by capital.

Quizplus · Accepted Answer

In the Cobb-Douglas production function, the term F1F1F1S1F1F1F10 represents the share of production contributed by capital. This is because the variable S1 represents the share of income going to capital, while the exponent α represents the elasticity of output with respect to capital. Thus, the term F1F1F1S1F1F1F10 captures the contribution of capital to total production.

In the Cobb-Douglas Production Function The α\alphaα Represents: A) Total Income

In the Cobb-Douglas Production Function The $\alpha$ Represents:
A) Total Income