Answer to Question #314575 in Macroeconomics for halwest

Question

 Explain the two characteristics of the Cobb Douglas production 

function that make it particularly useful to macroeconomists

Answer 1

1. Diminishing marginal product; which is expressed in terms of the average physical productivity. It's a change in total output due to a one unit change in total output due to the use of a particular output.

2. Output elasticities

Which shows the percentage in output due to a given percentage change in number of factor input.