Discussion
In the standard form of the Constant Elasticity of Substitution (CES) production function with two inputs, \(Q = A\left[aK^{-\theta} + (1-a)L^{-\theta}\right]^{-1/\theta}\), “A” is the:
Answer: C
In the CES production function the parameter A is the efficiency parameter, which measures the level of technology: a larger A gives more output from the same inputs. The parameter a is the distribution parameter, which fixes the share of the two factors, and theta is the substitution parameter, from which the elasticity of substitution is derived. The scale of production is governed by a separate degree of homogeneity in the general form. The answer is the efficiency parameter, option C.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development