Which of the following are NOT properties of Cobb‐Douglas production function? A. Cobb‐Douglas…
For the standard Y=A K^αL^(1−α),0<α<1, the function is homogeneous(A true). Average/marginal productivity falls as the corresponding input rises with the other fixed, so B…
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Which of the following are NOT properties of Cobb‐Douglas production function?
A. Cobb‐Douglas production function is a homogeneous production function
B. Curves representing average and marginal productivity of inputs are not downward sloping
C. Marginal productivity of labour and capital in Cobb‐Douglas production function are functions of the capital‐labour ratio
D. Iso‐quants of Cobb‐Douglas production functions are positively sloped
A. Cobb‐Douglas production function is a homogeneous production function
B. Curves representing average and marginal productivity of inputs are not downward sloping
C. Marginal productivity of labour and capital in Cobb‐Douglas production function are functions of the capital‐labour ratio
D. Iso‐quants of Cobb‐Douglas production functions are positively sloped
Answer and explanation
Correct answer B
For the standard Y=A K^αL^(1−α),0<α<1, the function is homogeneous(A true). Average/marginal productivity falls as the corresponding input rises with the other fixed, so B is not a property. MPL=(1−α)A(K/L)^α and MPK=αA(K/L)^(α−1), so C is true. Isoquants slope down, not positively, so D is not a property. B and D only is correct; other pairs wrongly classify A or C.
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UGC NET Economics