Answered: Suppose the production function is Q =…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Suppose the production function is Q = 8L + 15K where Q is the quantity of output, L is the quantity of labor used in production, and K is the quantity of capital used in production. What can be said about this production function?

It has Decreasing Returns to Scale

It has Constant Returns to Scale

It has Increasing Returns to Scale

There isn’t enough information to determine the Returns to Scale for this production function

2. You’re dreaming of what to do during a nice summer day. You could mow the lawn which you would pay someone $15 to do for you. You could go for a walk which you value at $11. You could also take a nap and ignore everyone and everything else which you would pay $29 to do. If you to take a nap, what is your opportunity cost?

Group of answer choices

$29

$26

$15

$11

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