In the Cobb-Douglas Production Function

question 63

Multiple Choice

In the Cobb-Douglas production function
,if a = 1/4,then:

• A)capital's share of GDP is one-fourth.
• B)labor's share of GDP is three-fourths.
• C)capital's share of GDP is three-fourths.
• D)labor's share of income is one-fourth.
• E)Both a and b are correct.

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Definitions:

Overhead Volume Variance

The difference between the budgeted and actual overhead costs attributable to a change in production volume.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or production of goods.

Budgeted Overhead

The estimated costs for overhead (indirect costs such as utilities, rent, and administrative salaries) that are planned for during a specific period in the budgeting process.

Total Overhead Rate

A ratio that calculates the total indirect costs of manufacture (including both fixed and variable overheads) relative to a related cost base, typically direct labor or machine hours.