Labor, L, and capital, K, are the only inputs in each of the following production functions: a 91 = (L + K)² 92 = (VT + vR)² b 93 = (20 + VT + vV®)* For each production function, use a spreadsheet to find the joutput associated with the following output combinations: L 2, K = 2; L=4, K = 4; and L= 8, K = 8. Determine whether each production unction exhibits increasing returns to scale, decreasing returns to scale, constant returns to scale, or ivariable returns to scale of this range.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Problem 7 This homework is about returns to scale.
Labor, L, and capital, K, are the only inputs in each of the
following production functions:
91 = (L+ K')²
a
92 = (VI + VR)*
b
(20 + VT + vR)*
93 =
For each production function, use a spreadsheet to find the
joutput associated with the following output combinations: L
2, K = 2; L=4, K = 4; and L= 8, K = 8. Determine whether each
production unction exhibits increasing returns to scale,
decreasing returns to scale, constant returns to scale, or
variable returns to scale of this range.
Transcribed Image Text:Problem 7 This homework is about returns to scale. Labor, L, and capital, K, are the only inputs in each of the following production functions: 91 = (L+ K')² a 92 = (VI + VR)* b (20 + VT + vR)* 93 = For each production function, use a spreadsheet to find the joutput associated with the following output combinations: L 2, K = 2; L=4, K = 4; and L= 8, K = 8. Determine whether each production unction exhibits increasing returns to scale, decreasing returns to scale, constant returns to scale, or variable returns to scale of this range.
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