Match the multi-variable function on the left with the scale property. Q(K.L) =4K1.5L1.5 A Decreasing returns to scale B. Increasing returns to scale Q(K.L)=4K0.6L0.4 C. Constant returns to scale Q(K.L)=2K04L0.3

Match the multi-variable function on the left with the scale property. Q(K.L) =4K1.5L1.5 A Decreasing returns to scale B. Increasing returns to scale Q(K.L)=4K0.6L0.4 C. Constant returns to scale Q(K.L)=2K04L0.3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

Match the multi-variable function on the left with the scale property.
Q(K.L)=4K1.5L1.5
A. Decreasing returns to scale
B. Increasing returns to scale
Q(K.L) =4K0.010.4
C. Constant returns to scale
Q (K,L) =2K0.4L0.3

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