Question
In the standard notation for a two-input Leontief production function, K denotes capital. What does L denote?
The correct answer is
Quantity of labour input
L denotes labour input. In a Leontief technology, output is limited by the input available in the smallest amount relative to its required fixed proportion. Labour is therefore not necessarily the binding input; that depends on the quantities of labour and capital.
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Important Questions from Production Function
- Match the stages of production with their corresponding characteristics :
(i) Stage-I (a) Total product declines, Marginal product is negative (ii) Stage-II (b) Total product increases at an increasing rate, marginal product positive (iii) Stage-III (c) Total product increases at a diminishing rate, marginal product is zero. - Neo-classical production function has which of the following characteristics ?
(a) Positive and diminishing marginal productivities of the factors
(b) Constant returns to scale
(c) Satisfies Inada conditions
Choose the correct answer from the code below : - Which one of the following is not an Hirofumi Ujawa condition for a well behaved production function ?
- Exponents of the Cobb-Douglas production represent :
- Given the production function $Q = 2 \cdot K^{1/3} \cdot L^{2/3}$, find the output level when 8 units of capital and 27 units of labour are used.
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