Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 21.5, Problem 2ST
To determine
Explain the constant returns to scale and long-run aggregate total cost (LRATV) curve.
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Explain what we mean by increasing, decreasing and constant returns to scale.
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QUESTION 1
For the production function Qs = K0.6L0.7 find the returns to scale, recall that a doubling of inputs that doulbes output is a CONSTANT returns to scale = 1.0
Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
Chapter 21 Solutions
Economics (MindTap Course List)
Ch. 21.2 - Prob. 1STCh. 21.2 - Prob. 2STCh. 21.2 - Prob. 3STCh. 21.2 - Prob. 4STCh. 21.3 - Prob. 1STCh. 21.3 - Prob. 2STCh. 21.3 - Prob. 3STCh. 21.4 - Prob. 1STCh. 21.4 - Prob. 2STCh. 21.4 - Prob. 3ST
Ch. 21.4 - Prob. 4STCh. 21.5 - Prob. 1STCh. 21.5 - Prob. 2STCh. 21.5 - Prob. 3STCh. 21 - Prob. 1QPCh. 21 - Prob. 2QPCh. 21 - Prob. 3QPCh. 21 - Prob. 4QPCh. 21 - Prob. 5QPCh. 21 - Prob. 6QPCh. 21 - Prob. 7QPCh. 21 - Prob. 8QPCh. 21 - Prob. 9QPCh. 21 - Prob. 10QPCh. 21 - Prob. 11QPCh. 21 - Prob. 12QPCh. 21 - Prob. 13QPCh. 21 - Prob. 14QPCh. 21 - Prob. 15QPCh. 21 - Prob. 16QPCh. 21 - Prob. 17QPCh. 21 - Prob. 18QPCh. 21 - Prob. 19QPCh. 21 - Prob. 1WNGCh. 21 - Prob. 2WNGCh. 21 - Prob. 3WNGCh. 21 - Prob. 4WNGCh. 21 - Prob. 5WNGCh. 21 - Prob. 6WNGCh. 21 - Prob. 7WNGCh. 21 - Prob. 8WNGCh. 21 - Prob. 9WNG
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- Show a LRAC curve that exhibits only increasing returns to scale. In the same graph draw the corresponding LRMC curvearrow_forwardThe phrase “returns to scale” is a way of describing the change in output that is produced as a result of a relative change in inputs used. Which of the following statements is true? If inputs are doubled and output doubles, this is called increasing returns to scale. If inputs are doubled and output doubles, this is called constant returns to scale. If inputs are tripled and output doubles, this is called increasing returns to scale. If inputs are doubled and output doubles, this is called decreasing returns to scale. If inputs are tripled and output doubles, this is called constant returns to scalearrow_forwardMicroeconomics - Production FunctionFind the returns to scale of the following production functions:F(K,L) = K1/2 * L1/2F(K,L) = A* K3/4 * L1/2F(K,L) = 3K + 2Larrow_forward
- Does the production function 50 q = 1000L - K exhibit increasing, decreasing, or constant returns to scale? This production function exhibits returns to scale.arrow_forwardDoes this production function q = 9K0.8L0.1 exhibits [increasing return to scale, constant return to scale, decreasing constant return to scale]arrow_forwardQuestion 3 For each one of the following production function determine whether it has constant, increasing or decreasing return to scale (prove): a. F(K, L) = 5K+ 3L b. F(K,L) K0.7 + 10.3 c. F(K,L)= K0.210.1 = d. F (K, L) = 5 (+1)arrow_forward
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