For the Cobb-Douglas Production Function F(L,K)= AL^αK^β,a Factor-Neutral Technical Change

question 50

Multiple Choice

For the Cobb-Douglas production function F(L,K) = AL^αK^β,a factor-neutral technical change would be represented by:

• A) an increase in the value of α.
• B) an increase in the value of β.
• C) values of α and β for which α + β = 1.
• D) an increase in the value of A.

---

Definitions:

Effective Rate

The actual interest rate an investor receives after taking into consideration compounding.

Monthly Compounded Rate

An interest rate applied to the principal and the accumulated interest of a loan or investment on a monthly basis.

Department Store

A retail establishment offering a wide range of consumer goods in different product categories known as "departments."

Compounded Monthly

Interest on an investment or loan is calculated and added to the principal amount at the end of each month.