For the Cobb-Douglas production function F(L,K) = ALαKβ, a factor-neutral technical change would be represented by:...
For the Cobb-Douglas production function F(L,K) = ALαKβ, a factor-neutral technical change would be represented by:
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b) values of α and β for which α + β = 1. |
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c) an increase in the value of A. |
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d) an increase in the value of α. |
Homework Answers
Answer
Option c
an increase in the value of A
The A represents the technology factor and as it increases is the increase in technology where other factors are constant in the production function so the change in A is factor-neutral technical change.
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For the Cobb-Douglas production function
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