Question

Q3.Explain the Cobb Douglas production.Discuss its properties.
long answer chahiye​

Answer 1

Answer:

Cobb-Douglas production function contains the following useful properties-

(i) The returns to scale is measured by the sum of exponents of Cobb-Douglas production function i.e., a + b

If a + b = 1, returns to scale are constant.

If a + b > 1, returns to scale are increasing.

If a + b < 1 , returns to scale are decreasing.

(ii) Cobb-Douglas function says that marginal product of a factor is dependent upon its amount used in production. Therefore, marginal product of labour depends on the amount of labour when no change is made in capital input. In the same way, a marginal product of capital depends upon the amount of capital which is used in production and diminishes as more capital is used with a fixed quantity of labour.

(iii) The exponents of labour and capital in Cobb-Douglas production

function give a measure of output elasticities of labour and capital respectively.

If output elasticity of a factors less then one, this will denote diminishing returns to a factor. Therefore, if the value of a i.e., output elasticity of labour is less than one (a< 1), it means, for example, that a 5% increase in labour will cause less than 5% increase in output. Hence, as the values of exponents a and b of labour and capital are less than one in Cobb-Douglas production function, they denote diminishing returns to a factor.

(iv) Cobb-Douglas production function can be extended by including more than two factors. For example, agricultural production is not only dependent on labour and capital used but also on the use of other inputs such as land, fertilizers, irrigation. Including these inputs in the Cobb-Douglas function,

We have –

Here D represents the land, G represents irrigation, F represents fertilizers And b2, b3, b4 are exponents of land, irrigation and fertilizers respectively.

(v) If the sums of exponents (a + b) in the two factors Cobb-Douglas production function

(Q =) is equal to one, then it would denote constant returns to scale.

(vi) The elasticity of sub-situation between labour and capital in Cobb-Douglas production function is equal to unity. Because of this unit elasticity of substitution between two factors in the production function, isoquants are convex to the origin shown in fig. 4.9;

Answer 2

Explanation:

Cobb Douglas production function i.e, a+b

✳️The returns to scale is measured by the sum of exponents;

• If a+b=1, returns to scale are constant
• If a+b>1, returns to the scale are increasing
• If a+b<1, returns to the scale are decreasing

✳️Cobb Douglas function says that marginal product of a factor is dependent upon its amount used in production.

✳️ The exponents of labour and capital in Cobb Douglas production function give a measure of output elasticities of labour and capital.

✳️Cobb Douglas production function can be extended by including more than two factor...

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That much only I know about the Cobb Douglas

hope it helps

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