Production Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G 1 7 H 2 8 X The profuction function is given as: Q=αK + βL B andf E lie on the same isoquant, while D and G are on a higher isoquant. 3. a. This production exhibits what kind of returns to scale? Explain how you arrived at this conclusion. b. Will any combination of α and β lead to this production exhibiting increasing returns to scale? c. True or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain.
Production Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G 1 7 H 2 8 X The profuction function is given as: Q=αK + βL B andf E lie on the same isoquant, while D and G are on a higher isoquant. 3. a. This production exhibits what kind of returns to scale? Explain how you arrived at this conclusion. b. Will any combination of α and β lead to this production exhibiting increasing returns to scale? c. True or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 4.10P
Related questions
Question
| Production Point | Capital (K) | Labor (L) | Output (Q) |
| A | 1 | 1 | 2 |
| B | 2 | 2 | |
| C | 1 | 3 | |
| D | 2 | 4 | |
| E | 1 | 5 | |
| F | 2 | 6 | |
| G | 1 | 7 | |
| H | 2 | 8 | X |
The profuction function is given as: Q=αK + βL
B andf E lie on the same isoquant, while D and G are on a higher isoquant.
3.
a. This production exhibits what kind of returns to scale? Explain how you arrived at this conclusion.
b. Will any combination of α and β lead to this production exhibiting increasing returns to scale?
c. True or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain.
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