The Cobb-Douglas production function is given by: Y = AK^(α)L^(1−α) where 0 < α < 1.
a) Define A, K, and L
b) What does it mean that Y is proportional to A?
c) What does it mean that the marginal product of capital (MPK) and the marginal product of labor (MPL) are greater than zero? Show that the marginal products are positive in the Cobb-Douglas case.