Assume That the Production Function Is Cobb-Douglas with Parameter α

question 27

Multiple Choice

Assume that the production function is Cobb-Douglas with parameter α = 0.3. In the neoclassical model, if the labour force increases by 10 percent, then output:

• A)increases by about 10 percent.
• B)increases by about 7 percent.
• C)increases by about 3 percent.
• D)does not increase since the new workers are unemployed.

---

Definitions:

Basilar Membrane

A structure in the inner ear that plays a key role in the sense of hearing by vibrating in response to sound, which ultimately converts acoustic signals into electrical impulses for the brain to interpret.

Middle Ear

the part of the ear located between the eardrum and the inner ear that contains three small bones transmitting sound vibrations to the inner ear.

Auditory Canal

A tube-like structure that leads from the outer ear to the eardrum, conducting sound waves to the eardrum.

Semicircular Canal

Structures in the inner ear involved in maintaining balance and sensing motion.