Final answer:
The correct option is B, stating that the Cobb-Douglas function has a constant share of labor and capital income, highlighting its feature of constant returns to scale and stable input proportions.
Step-by-step explanation:
The correct statement about the Cobb-Douglas production function is B) Cobb-Douglas function has a constant share of labor and capital income. The Cobb-Douglas production function is a mathematical model widely used in economics to represent the technological relationship between the amounts of two or more inputs (typically labor and capital) and the amount of output that can be produced by those inputs. It is characterized by its property that the percentage share of each input in total output remains constant even as the absolute quantities of inputs and outputs change.
This property satisfies an important economic concept known as constant returns to scale, meaning that doubling the amount of inputs will also double the output, assuming all other factors remain constant. A distinctive feature of the Cobb-Douglas function is that it reflects the proportions in which labor and capital contribute to production, and these proportions remain stable over time, which contradicts options A, C, and D.