Consider an economy with the following Cobb-Douglas production function (note th
ID: 1095989 • Letter: C
Question
Consider an economy with the following Cobb-Douglas production function (note that this production function does not contain natural capital). If the capital stock and real GDP grows at 3 percent per year, labor hours grow at 4 percent per year, and the quantity of human capital is constant, what is the average annual growth rate of technology (or total factor productivity)?
A. 1 percent B. 0 percent C. 4 percent D. 2 percent E. 3 percent Reset Selection
The sources of labor productivity growth can come about from:
A. Investments in human capital B. Technological advances C. More capital per hour of work D. All of the above
A. decreasing returns to scale.
B. increasing returns to scale.
C. constant returns to scale.
D. hyperbolic returns to scale.
A. increasing marginal product in each factor.
B. constant marginal product in each factor.
C. decreasing marginal product in each factor.
D. hyperbolic marginal product in each factor.
Consider the production function: Y = K + L + H. This production function exhibits:A. decreasing returns to scale.
B. increasing returns to scale.
C. constant returns to scale.
D. hyperbolic returns to scale.
0.5 Points Consider the production function: Y = K + L + H. This production function exhibits:A. increasing marginal product in each factor.
B. constant marginal product in each factor.
C. decreasing marginal product in each factor.
D. hyperbolic marginal product in each factor.
Explanation / Answer
1.C. 4 percent
2.D. All of the above
3.B. increasing returns to scale.
4.C. decreasing marginal product in each factor.