If the production function describing an economy is Y = 100 K^.25L^.75, then the share of output going to labour: A)is 25 percent. B)is 75 percent. C)depends on the quantities of labour and capital. D)depends on the state of technology.

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Quizplus · Accepted Answer

In a Cobb-Douglas production function like Y = 100 K^0.25 L^0.75, the exponent of L (0.75) represents the share of output going to labor, which is 75 percent.

If the Production Function Describing an Economy Is Y =