Using a Cobb-Douglas Production Function and Assuming the Share of Labor

question 18

Multiple Choice

Using a Cobb-Douglas production function and assuming the share of labor used in production remains constant,it can be shown that

• A)real wages will increase in tandem with the price of capital.
• B)a stable relationship will exist between the average product of labor and the marginal product of labor.
• C)real wages will decrease as the average product of labor increases.
• D)real wages and output are inversely related.

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