In an equation named for Cobb and Douglas, this constant is represented by a capital A and multiplies K to the alpha and L to the beta. For 10 points each:
[10h] Name this constant that represents an economy’s efficiency at converting inputs into output such as GDP.
ANSWER: total factor productivity [or TFP; or multi-factor productivity; prompt on productivity]
[10e] The Cobb–Douglas production function accounts for inputs in capital and this other factor, represented by a capital L. This factor is provided to producers by workers in exchange for wages.
ANSWER: labor input
[10m] Capital and labor have diminishing returns in production over time according to a model of this phenomenon named for Solow and Swan. This phenomenon is represented by an outward shift of a country’s production possibility curve.
ANSWER: economic growth [accept exogenous growth or endogenous growth; accept the Solow-Swan economic growth model]
<Ethan Ashbrook, Social Science - Economics> ~20488~ <Editor: Athena Kern>