The following table shows estimates of Cobb-Douglas production function parameters for several industries. Industry Food and beverages Textiles Furniture Petroleum Stone, clay, etc. Primary metals O Food and beverages Textiles Petroleum Stone, clay, etc. O Textiles Primary metals Which of the following industries appear to exhibit decreasing returns to scale? Check all that apply. Stone, clay, etc. Source: John R. Moroney, "Cobb-Douglas Production Functions and Returns to Scale in U.S. Manufacturing Industry," Western Economic Journal 6, no. 1 (December 1967): Table 1, p. 46. Food and beverages Which industry comes closest to exhibiting constant returns to scale? Capital Elasticity (B₁) 0.555 Stone, clay, etc. 0.121 0.205 0.308 0.632 0.371 Furniture Production Worker Petroleum Elasticity (B₂) 0.439 Primary metals 0.549 0.802 0.546 0.032 0.077 Nonproduction Worker Elasticity (B3) 0.076 0.335 0.103 0.093 0.366 0.509 In which industry will a given percentage increase in production workers result in the largest percentage increase in output? Sum of Elasticities (B1 + B₂+ B3) 1.07 1.004 1.109 0.947 1.029 0.958

The following table shows estimates of Cobb-Douglas production function parameters for several industries. Industry Food and beverages Textiles Furniture Petroleum Stone, clay, etc. Primary metals O Food and beverages Textiles Petroleum Stone, clay, etc. O Textiles Primary metals Which of the following industries appear to exhibit decreasing returns to scale? Check all that apply. Stone, clay, etc. Source: John R. Moroney, "Cobb-Douglas Production Functions and Returns to Scale in U.S. Manufacturing Industry," Western Economic Journal 6, no. 1 (December 1967): Table 1, p. 46. Food and beverages Which industry comes closest to exhibiting constant returns to scale? Capital Elasticity (B₁) 0.555 Stone, clay, etc. 0.121 0.205 0.308 0.632 0.371 Furniture Production Worker Petroleum Elasticity (B₂) 0.439 Primary metals 0.549 0.802 0.546 0.032 0.077 Nonproduction Worker Elasticity (B3) 0.076 0.335 0.103 0.093 0.366 0.509 In which industry will a given percentage increase in production workers result in the largest percentage increase in output? Sum of Elasticities (B1 + B₂+ B3) 1.07 1.004 1.109 0.947 1.029 0.958

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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