(d) [ ] Indicate and show whether this production function exhibits increasing, decreasing or constant returns to scale. Next, interpret your answer (i.e., explain what does
(d) [ ] Indicate and show whether this production function exhibits increasing, decreasing or constant returns to scale. Next, interpret your answer (i.e., explain what does
Chapter11: Labor Markets
Section: Chapter Questions
Problem 1SQ
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Question
Show full answers to part d)
![Labor
(L)
0
1
2
3
4
5
6
0
0
10
20
30
40
50
60
1
20
30
40
50
60
70
80
Capital (K)
3
60
70
80
90
100
110
120
2
40
50
60
70
80
90
100
4
80
90
100
110
120
130
140
5
100
110
120
130
140
150
160
6
120
130
140
150
160
170
180
(a) [
] Indicate how much output the firm can
produce hiring 4 workers and using 3 units of capital.
(b) [
] Identify which other combination(s)
of labor and capital, (L,K), could the firm use to
produce the same level of output you indicated (a).
List ALL of them.
(c) [
] On a graph, plot the combination of
labor and capital indicated in (a) and all the
combinations you determined in (b) to draw the
isoquant for the corresponding level of output.
Label your graph.
(d) [
] Indicate and show whether this
production function exhibits increasing,
decreasing or constant returns to scale. Next,
interpret your answer (i.e., explain what does
increasing, decreasing or constant returns to scale](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3574180-5be7-46af-9f18-c1fbb9ec682c%2F3f891894-4986-4239-8549-b8d940e5aebd%2F7ofj54u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Labor
(L)
0
1
2
3
4
5
6
0
0
10
20
30
40
50
60
1
20
30
40
50
60
70
80
Capital (K)
3
60
70
80
90
100
110
120
2
40
50
60
70
80
90
100
4
80
90
100
110
120
130
140
5
100
110
120
130
140
150
160
6
120
130
140
150
160
170
180
(a) [
] Indicate how much output the firm can
produce hiring 4 workers and using 3 units of capital.
(b) [
] Identify which other combination(s)
of labor and capital, (L,K), could the firm use to
produce the same level of output you indicated (a).
List ALL of them.
(c) [
] On a graph, plot the combination of
labor and capital indicated in (a) and all the
combinations you determined in (b) to draw the
isoquant for the corresponding level of output.
Label your graph.
(d) [
] Indicate and show whether this
production function exhibits increasing,
decreasing or constant returns to scale. Next,
interpret your answer (i.e., explain what does
increasing, decreasing or constant returns to scale
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