Answered: The simple (and silly) production…

The simple (and silly) production function q = K/2 L-/2 (where q is output produced, and K and L + are units of capital and labor used, respectively), exhibits... constant returns to scale

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

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.

Question

The simple (and silly) production function q = K1/2
+ L1/2
(where q is output produced, and K and L
are units of capital and labor used, respectively),
exhibits...
constant returns to scale
shyness when getting on a scale
increasing returns to scale
decreasing returns to scale

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