If a Cobb-Douglas Production Function Has Alpha = 0

question 4

Multiple Choice

If a Cobb-Douglas production function has alpha = 0.34 and beta = 0.42, then a 1% increase in inputs results in a(n) ________ change in output.

• A)0.8%
• B)8%
• C)0.76%
• D)-0.76%

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Definitions:

Literacy Rates

The percentage of a population that is able to read and write at a specified age, often used as an indicator of educational achievement and social development.

U.S. Economy

The economic system of the United States characterized by a mixed economy that supports private freedom, including a variety of private businesses, alongside significant government regulation and programs.

Imported Goods

Items brought into a country from another country for sale or use.

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Taxes imposed by state governments on imported goods, which were once a source of revenue and economic policy before being predominantly managed at the federal level in the United States.