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

question 14

Multiple Choice

For the Cobb-Douglas production function F(L,K) = AL^αK^β,a technical change that increases the productivity of capital 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 β > α.
• D) an increase in the value of A.

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Definitions:

Complicated Technology

Advanced and often sophisticated technology that may be difficult to understand or operate.

Simple Technology

Technology that is straightforward, easy to use, and not complicated by advanced features, often implying a lower level of sophistication.

Costs

Expenses incurred in the production of goods or services, including but not limited to materials, labor, and overhead.

Revenues

The total amount of money generated by the sale of goods or services related to a company's primary operations.