Consider the Cobb-Douglas Production Function F(L,K)= AL^aK^b

question 28

Multiple Choice

Consider the Cobb-Douglas production function F(L,K) = AL^aK^b.Which of the following statements is true?

• A) Increases in a increase labour's productivity and raise MRTS_LK
• B) Decreases in a increase labour's productivity and raise MRTS_LK
• C) Increases in a increase labour's productivity and lower MRTS_LK
• D) Changes in a will not affect MRTS_LK