{"id":44383,"date":"2024-04-15T21:42:59","date_gmt":"2024-04-15T21:42:59","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=44383"},"modified":"2024-04-15T21:42:59","modified_gmt":"2024-04-15T21:42:59","slug":"a-significant-property-of-the-cobb-douglas-production-function-is-that-the-elasticity-of-substitutes-between-input-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-significant-property-of-the-cobb-douglas-production-function-is-that-the-elasticity-of-substitutes-between-input-is\/","title":{"rendered":"A significant property of the Cobb-Douglas production function is that the elasticity of substitutes between input is"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9760840ccd3\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    Equal to 1                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    More than 1                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Less than 1                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Zero                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: A. Equal to 1.<\/p>\n<p>The Cobb-Douglas production function is a mathematical function that describes the relationship between the inputs (capital and labor) and the output of a production process. The function is given by the following equation:<\/p>\n<p>$Q = AK^aL^{1-a}$<\/p>\n<p>where $Q$ is the output, $K$ is the capital, <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> $L$ is the labor, $a$ is the elasticity of substitution between capital and labor, and $A$ is a constant.<\/p>\n<p>The elasticity of substitution is a measure of how easily one input can be substituted for another. If the elasticity of substitution is equal to 1, then the inputs are perfect substitutes. This means that if the price of one input increases, the firm will be able to completely substitute the other input without any loss in output.<\/p>\n<p>If the elasticity of substitution is less than 1, then the inputs are imperfect substitutes. This means that if the price of one input increases, the firm will not be able to completely substitute the other input without some loss in output.<\/p>\n<p>If the elasticity of substitution is greater than 1, then the inputs are complementary. This means that if the price of one input increases, the firm will use more of the other input.<\/p>\n<p>In the case of the Cobb-Douglas production function, the elasticity of substitution is equal to 1. This means that capital and labor are perfect substitutes. This is a significant property of the Cobb-Douglas production function because it implies that the firm can easily substitute one input for the other in response to changes in prices.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Equal to 1. This is the correct answer. The elasticity of substitution between capital and labor is equal to 1 in the Cobb-Douglas production function.<\/li>\n<li>Option B: More than 1. This is not the correct answer. The elasticity of substitution between capital and labor is equal to 1 in the Cobb-Douglas production function.<\/li>\n<li>Option C: Less than 1. This is not the correct <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> answer. The elasticity of substitution between capital and labor is equal to 1 in the Cobb-Douglas production function.<\/li>\n<li>Option D: Zero. This is not the correct answer. The elasticity of substitution between capital and labor is equal to 1 in the Cobb-Douglas production function.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A significant property of the Cobb-Douglas production function is that the elasticity of substitutes between input is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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