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Exercise 2 Do the following production functions exhibit increasing, decreasing, or constant returns to scale? Show. a) q(L,K) = 5L²/3 K1/3 b) q(L,K) = L² + K² c) q(L,K) = 50√LK + L + K d) q(L, K) = L²K e) q(L, K) = L0.3 K 0.2

Exercise 2 Do the following production functions exhibit increasing, decreasing, or constant returns to scale? Show. a) q(L,K) = 5L²/3 K1/3 b) q(L,K) = L² + K² c) q(L,K) = 50√LK + L + K d) q(L, K) = L²K e) q(L, K) = L0.3 K 0.2

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Exercise 2 Do the following production functions exhibit increasing, decreasing, or constant returns to scale? Show. a) q(L,K) = 5L²/3 K1/3 b) q(L,K) = L² + K² c) q(L,K) = 50√LK + L + K d) q(L,K) = L²K e) q(L,K) = L0.3 K0.2
Transcribed Image Text:Exercise 2 Do the following production functions exhibit increasing, decreasing, or constant returns to scale? Show. a) q(L,K) = 5L²/3 K1/3 b) q(L,K) = L² + K² c) q(L,K) = 50√LK + L + K d) q(L,K) = L²K e) q(L,K) = L0.3 K0.2
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