Suppose You Have a Cobb-Douglas Function with a Capital Elasticity

question 6

Multiple Choice

Suppose you have a Cobb-Douglas function with a capital elasticity of output (á) of 0.28 and a labor elasticity of output (â) of 0.84.What statement is correct?

• A) There are increasing returns to scale
• B) If the amount of labor input (L)is increased by 1%,the output will increase by 0.84%
• C) If the amount of capital input (K)is decreased by 1%,the output will decrease by 0.28%
• D) The sum of the exponents in the Cobb-Douglas function is 1.12.
• E) All of the above

---

Definitions:

Native Culture

The traditional practices, beliefs, and ways of life inherent to the original inhabitants of a region or country.

Negotiated Social Interaction

Refers to the process through which individuals use social cues and norms to guide their interactions and reach mutual understanding or agreements.

Blumer

Herbert Blumer was a sociologist who significantly contributed to the development of symbolic interactionism, a theory focusing on the subjective meaning that humans attach to actions, objects, and interactions.

Elitist And Ascriptive

Pertaining to a system or belief where social status is assigned based on inherent traits or affiliations, often favoring a small, privileged group.