1. Define the concept of constant returns to scale. 2. Why does it make economic sense to assume that the production function exhibits constant returns to scale. Why does it make economic sense to assume that the production function exhibits positive returns to capital? 3. Define the concept of diminishing marginal returns to labor. Why does it make economic sense to assume that the production function exhibits diminishing marginal returns to labor?

1. Define the concept of constant returns to scale. 2. Why does it make economic sense to assume that the production function exhibits constant returns to scale. Why does it make economic sense to assume that the production function exhibits positive returns to capital? 3. Define the concept of diminishing marginal returns to labor. Why does it make economic sense to assume that the production function exhibits diminishing marginal returns to labor?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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