In the Cobb-Douglas production function $Y = K ^ { a } L ^ { 1 - a }$ , the $\alpha$ represents:
A) total income
B) the share of production contributed by labor
C) the total amount of capital in an economy
D) the total demand for capital in an economy
E) the share of production contributed by capital

Question

Quizplus · Accepted Answer

In the Cobb-Douglas production function, the exponent $a$ represents the share of production contributed by capital.

In the Cobb-Douglas Production Function Y=KaL1−aY = K ^ { a } L ^ { 1 - a }Y=KaL1−a

In the Cobb-Douglas Production Function $Y = K ^ { a } L ^ { 1 - a }$