In the Cobb-Douglas Production Function $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$

question 13

Multiple Choice

In the Cobb-Douglas production function $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$ , labor's share of GDP is:

• A) two-thirds, regardless of how much labor there is
• B) two-thirds but can change as more laborers are added
• C) one-third, regardless of how much labor there is
• D) always equal to one
• E) Not enough information is given.

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Definitions:

FIFO

An inventory valuation method where the first items purchased are the first ones to be used or sold.

Cost Per Unit

The total expense involved in creating a product, divided by the number of units produced, giving a per-unit cost.

Journal Entries

Recorded transactions in a company's general ledger, showing accounts affected and amounts, to maintain accurate financial records.

Process Cost System

An accounting system used in manufacturing where costs are assigned to batches or processes, suitable for homogeneous products.