What Do We Learn from the Shape of the Cobb-Douglas

question 49

Multiple Choice

What do we learn from the shape of the Cobb-Douglas production function?

• A)its slope remains constant as labor input increases
• B)the marginal product of labor declines as the labor input falls
• C)there are diminishing returns to labor
• D)all of the above
• E)none of the above

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Definitions:

Depletion Rate

The rate at which natural resources are consumed or used, often applied in accounting to allocate the cost of a natural resource over its useful life.

Residual Value

The estimated salvage value of an asset at the end of its useful life, important for depreciation calculations.

Oil Well

A drilling operation established for the extraction of oil from the earth, constituting a significant part of the oil and gas industry.

Amortization Expense

The methodical distribution of the expense of an intangible asset throughout its lifespan.