In the Cobb-Douglas Production Function $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }$

question 13

Multiple Choice

In the Cobb-Douglas production function ( $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }$ ) :

• A) the marginal product of labor (L)is equal to ?1
• B) the average product of labor (L)is equal to ?2
• C) if the amount of labor input (L)is increased by 1 percent,the output will increase by ?1 percent
• D) a and b
• E) a and c

---

Definitions:

Direct Labor Wage Rate

The rate of compensation paid to employees who directly work on the production of goods or services.

Raw Materials Cost

The expense incurred by a company for the raw materials that are used in the manufacturing process to produce finished goods.

Budgeted Selling Price

The price at which a company plans to sell its products or services, often used in budgeting and financial forecasting.

Direct Labor-Hours

A quantification of the total hours spent by employees working directly on the production of goods or services.