### Long-Run Isoquants and Inputs**Problem Statement:**Consider the following long-run isoquants and inputs. In which case(s) is there increasing returns to scale in the long run?**Isoquant Analysis:**- **Graph A:** - Vertical axis (K): Capital (3 to 6) - Horizontal axis (L): Labor (3 to 6) - Isoquants for output levels: 100Q and 200Q - Moving from 100Q to 200Q requires doubling inputs.- **Graph B:** - Vertical axis (K): Capital (3 to 6) - Horizontal axis (L): Labor (3 to 6) - Isoquants for output levels: 100Q and 300Q - Moving from 100Q to 300Q indicates more than doubling of output with the same doubling of inputs, suggesting increasing returns to scale.- **Graph C:** - Vertical axis (K): Capital (3 to 6) - Horizontal axis (L): Labor (3 to 6) - Isoquants for output levels: 100Q and 150Q - Output increase is not proportional, indicating decreasing returns to scale.- **Graph D:** - Vertical axis (K): Capital (3 to 6) - Horizontal axis (L): Labor (3 to 6) - Isoquants for output levels: 100Q and 400Q - Significant increase in output relative to input doubling, indicating increasing returns to scale.**Options:**- A. A only.- B. A and B.- C. B only.- D. C only.- E. B and D.**Correct Answer:**- **E. B and D.**Graphs B and D demonstrate increasing returns to scale in the long run, as they show that output increases more than proportionally compared to the increase in inputs.

Increasing return to scale means output increases more than the increase in inputs…

Consider the following long-run isoquants and inputs. In which case(s) is there increasing returns to scale in the long-run' B K 6 3 300Q 200Q 100Q 100Q 3 6 K K D 6 -- 150Q 3 400Q 100Q 100Q 36 36 O A. A only. O B. A and B. ОС.В only. O D.C only. O E. B and D.

Consider the following long-run isoquants and inputs. In which case(s) is there increasing returns to scale in the long-run' B K 6 3 300Q 200Q 100Q 100Q 3 6 K K D 6 -- 150Q 3 400Q 100Q 100Q 36 36 O A. A only. O B. A and B. ОС.В only. O D.C only. O E. B and D.

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Chapter1: Making Economics Decisions

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Question

### Long-Run Isoquants and Inputs

**Problem Statement:**
Consider the following long-run isoquants and inputs. In which case(s) is there increasing returns to scale in the long run?

**Isoquant Analysis:**

- **Graph A:**
- Vertical axis (K): Capital (3 to 6)
- Horizontal axis (L): Labor (3 to 6)
- Isoquants for output levels: 100Q and 200Q
- Moving from 100Q to 200Q requires doubling inputs.

- **Graph B:**
- Vertical axis (K): Capital (3 to 6)
- Horizontal axis (L): Labor (3 to 6)
- Isoquants for output levels: 100Q and 300Q
- Moving from 100Q to 300Q indicates more than doubling of output with the same doubling of inputs, suggesting increasing returns to scale.

- **Graph C:**
- Vertical axis (K): Capital (3 to 6)
- Horizontal axis (L): Labor (3 to 6)
- Isoquants for output levels: 100Q and 150Q
- Output increase is not proportional, indicating decreasing returns to scale.

- **Graph D:**
- Vertical axis (K): Capital (3 to 6)
- Horizontal axis (L): Labor (3 to 6)
- Isoquants for output levels: 100Q and 400Q
- Significant increase in output relative to input doubling, indicating increasing returns to scale.

**Options:**
- A. A only.
- B. A and B.
- C. B only.
- D. C only.
- E. B and D.

**Correct Answer:**
- **E. B and D.**

Graphs B and D demonstrate increasing returns to scale in the long run, as they show that output increases more than proportionally compared to the increase in inputs.

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