For the Cobb-Douglas production function F(L,K) = AL?K?, a technical change that increases the productivity of capital would be represented by:
A. an increase in the value of ?.
B. an increase in the value of ?.
C. values of ? and ? for which ? > ?.
D. an increase in the value of A.
B. an increase in the value of ?.
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Neoclassical growth theory assumes that technological progress
A) is determined by investment. B) is determined by saving. C) responds to economic incentives. D) is a purely chance event.
If a foreign exchange speculator expects the spot rate of the dollar nine months from today to be lower than today's forward rate on the dollar for delivery in nine months, she may
A) buy dollars in the spot market nine months from today. B) sell dollars in the spot market nine months from today. C) sell dollars forward today and buy them in the spot market nine months from today. D) buy dollars forward today and resell them in the spot market nine months from today.
If a person who generates a negative externality incorporates into his or her private cost-benefit calculations the effects that this externality will have on third parties, the externality has been
A. substituted. B. accommodated. C. compounded. D. internalized.
Suppose a person's utility for leisure (L) and consumption (Y) can be expressed as U = Y + L0.5. Assuming a wage rate of $10 per hour, show what happens to the person's labor supply curve when the person wins a lottery prize of $100 per day
What will be an ideal response?