Derive the output elasticity of labour. Consider the following Cobb-Douglas production function:Y = AKªLB(1)%3Dwhere Y is aggregate output, K is capital, L is labour, and A, a, and ß are positive constants.

Ans. The output elasticity of labour is the ratio of percentage change in total output and…

Answered: Consider the following Cobb-Douglas…

Consider the following Cobb-Douglas production function: Y = AK“L® (1) where Y is aggregate output, K is capital, L is labour, and A, a, and ß are positive constants.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.8P

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Derive the output elasticity of labour.

Consider the following Cobb-Douglas production function:
Y = AKªLB
(1)
%3D
where Y is aggregate output, K is capital, L is labour, and A, a, and ß are positive constants.

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