Answer to Question #307873 in Macroeconomics for tsegesh

Question

define production function and cobb-douglas production function?

Answer 1

Production function is a way of calculating what comes out of production in comparison with what has gone into it. It attempts to calculate the maximum amount of output you can get from a certain number of inputs.

The Cobb-Douglas production function reflects the relationships between its inputs that is, physical capital and labor - and the amount of output produced. It's a means for calculating the impact of changes in the inputs, the relevant efficiencies, and the yields of a production activity.

The function might take the below format

$Q(L,K)=A*L^\beta *K^\alpha$