Asked by
Adrian Reyna
on Dec 01, 2024
Verified
if the exponents in the production function were 0.80 for x1 and 0.20 for x2, this production function would exhibit (constant, increasing, decreasing) returns to scale and (would, would not) have diminishing technical rate of substitution.
A) constant, would
B) decreasing, would not
C) increasing, would
D) constant, would not
E) decreasing, would
Production Function
A mathematical representation that defines the relationship between inputs used in production and the output generated from those inputs.
Returns To Scale
The rate at which production increases in response to proportional increases in all inputs.
- Determine the categories of scale returns (escalating, diminishing, unchanging) through analyzing production function coefficients.
- Assess production functions to determine the presence or absence of a decreasing technical rate of substitution.
Verified Answer
PH
Learning Objectives
- Determine the categories of scale returns (escalating, diminishing, unchanging) through analyzing production function coefficients.
- Assess production functions to determine the presence or absence of a decreasing technical rate of substitution.