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

question 59

Multiple Choice

For the Cobb-Douglas production function F(L,K) = AL^aK^b,a technical change that increases the productivity of capital would be represented by

• A) An increase in the value of a
• B) An increase in the value of b
• C) Values of a and b for which b > a
• D) An increase in the value of A

---

Definitions:

Price

The price expected, obligatory, or delivered in payment for a particular thing.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Equation

A mathematical statement that asserts the equality of two expressions, typically represented with the symbol "=".

Choice Set

The collection of all possible options available to a decision-maker in a given scenario.