Write a Cobb-Douglas production function for which capital earns one-fourth of total income.

Write a Cobb-Douglas production function for which capital earns one-fourth of total income.

 

Answer:

cobb douglas production function is of the type Y=AL^{\beta }K^{\alpha }

where α + β = 1,

α is total capital used for capital and  β is proportion used for labor

for α = .25, production function for which capital earns one-fourth of total income

Y= A*K^.25 * L^.75

Asked on February 15, 2018 in economics.
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