Question 3. Do the following functions exhibit increasing, constant, or decreasing returns to scale? Explain your answers. a. q = aL + bk, where a and b are positive constants. b. The production function Q=2M0.5K0.5L0.5, where Mis materials, K is capital and L is labour. This production function has three inputs: M, K and L. c. q=2+3L+2K
Question 3. Do the following functions exhibit increasing, constant, or decreasing returns to scale? Explain your answers. a. q = aL + bk, where a and b are positive constants. b. The production function Q=2M0.5K0.5L0.5, where Mis materials, K is capital and L is labour. This production function has three inputs: M, K and L. c. q=2+3L+2K
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis
Section: Chapter Questions
Problem 8TY
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![Question 3. Do the following functions exhibit increasing,
constant, or decreasing returns to scale? Explain your
answers.
a. q = aL + bK, where a and b are positive constants.
b. The production function Q=2M0.5K0.5L0.5, where M is
materials, K is capital and L is labour. This production
function has three inputs: M, K and L.
c. q = 2+3L+2K
d. q = 0.5L¹/¹K3/2 |](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae5d7990-6d9f-4e4a-99d5-f414a75004e7%2Fb8d19daa-bc4f-4559-941e-ab2fa8dd7f08%2Fzpikw6_processed.png&w=3840&q=75)
Transcribed Image Text:Question 3. Do the following functions exhibit increasing,
constant, or decreasing returns to scale? Explain your
answers.
a. q = aL + bK, where a and b are positive constants.
b. The production function Q=2M0.5K0.5L0.5, where M is
materials, K is capital and L is labour. This production
function has three inputs: M, K and L.
c. q = 2+3L+2K
d. q = 0.5L¹/¹K3/2 |
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