Question

The production function Q = 20K0.75L0.25 exhibits

A decreasing returns to scale.

B constant returns to scale.

C increasing returns to scale.

D increasing, then diminishing returns to scale.

E negative returns to scale.

Answer #1

The production function is as follows -

Q = 20K0.75 L0.25

Output elasticity of capital = 0.75

Output elasticity of labor = 0.25

When the sum of output elasticity of capital and output elasticity of labor is equal to one then the production function exhibits constant return to scale.

When the sum of output elasticity of capital and output elasticity of labor is greater than one then the production function exhibits increasing return to scale.

When the sum of output elasticity of capital and output elasticity of labor is less than one then the production function exhibits decreasing return to scale.

Output elasticity of capital + Output elasticity of labor = 0.75 + 0.25 = 1

In the given case, the sum of output elasticity of capital and output elasticity of labor is equal to one.

Thus,

The production function exhibits constant returns to scale.

**Hence, the correct answer is
the option (B).**

1) The production function Q =
50K0.25L0.25 exhibits
A. increasing returns to scale. B. constant returns to
scale.
C. decreasing returns to scale. Answer
D. increasing, then diminishing returns to scale.
E. negative returns to scale.
2) The production function Q =
50K0.25L0.75 exhibits
A. increasing, then diminishing returns to scale. B. increasing
returns to scale.
C. decreasing returns to scale.
D. constant returns to scale. Answer
E. negative returns to scale.
could you please explaing me the reason of...

A? Cobb-Douglas production function
A. exhibits constant returns to scale.
B. exhibits decreasing returns to scale.
C. exhibits increasing returns to scale.
D. can exhibit? constant, increasing, or decreasing returns to
scale.

Production function, Q = 10L +
5K0.9+10L0.5K0.4 is subject
to:
a) increasing returns to scale.
b) decreasing returns to scale.
c) constant returns to scale.
d) economies of scope.
e) diseconomies of scope.

For each of the following production functions, determine
whether it exhibits increasing, constant or decreasing returns to
scale: a) Q = K + L b) Q = L + L/K c) Q = Min(2K,2L) d) Q = (L.5
)(K.5)

Does the Production Function Q = min(K,4L) have increasing,
constant or decreasing returns to scale?

Does the Production Function Q = 6K + 3L have increasing,
constant or decreasing returns to scale?

For each of the following production functions, determine if the
technology exhibits increasing, decreasing, or constant returns to
scale.
a. ??(??,??)=2??+??
b. ??(??, ??) = √?? + √??
c. ??(??, ??) = ???? + ??2 + ??2 d. ??(??, ??) = √????

Determine whether the following production functions exhibit
increasing, decreasing or constant returns to scale.
a. Q = L + K
b. Q = 10KL
c. Q = L + K1/2L 1/2 + K
d. Q = 10K1/4L 1/4

Suppose the production function for widgets is given by: q = kl
– 0.8k2 – 0.2l2, where q represents the
annual quantity of widgets produced, k represents annual capital
input, and l represents annual labor input. Which of the following
statements is correct?
a.
The widget production function exhibits constant returns to
scale.
b.
The widget production function exhibits increasing returns to
scale.
c.
The widget production function exhibits decreasing returns to
scale.
d.
The widget production function is homogeneous...

2. A firm has the following linear production function:
q = 5L + 2K
a. Does this firm’s production function exhibit diminishing
returns to labor?
b. Does this production function exhibit diminishing returns to
capital?
c. Graph the isoquant associated with q = 20.
d. What is the firm’s MRTS between K and L?
e. Does this production technology exhibit decreasing, constant,
or increasing returns to scale?

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