Production function with constant returns to scale for firm

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Reference no: EM131236948

1: In a Cobb-Douglas production function with constant returns to scale for a firm that produces using only labor and capital, if the share of income that goes to labor is 42%, what does alpha equal?

Enter your number in decimal form as opposed to percentage form, rounded to two decimal places - use only numbers, a decimal point, and/or a negative sign as needed.

2: Consider the production function graphed with output on the vertical axis and labor on the horizontal axis. Which of the following is true about this production function?

A - It shows that the more labor we add the lower the amount of output we make.

B - Its slope is the average product of labor.

C - Its slope gets flatter as more labor is added.

D - It shows the effect on output of increasing the materials that workers have to produce with.

Reference no: EM131236948

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