Answered: 3. Do the following production…

3. Do the following production functions exhibit constant, decreasing or increasing returns to scale? Show your work. A. Q=LK³ B. Q=L1/2K 1/4 = C. Q 10K+5L D. Q=2K²+L³

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 27RQ: What is the difference between economies of scale, constant returns to scale, and diseconomies of...

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3. Do the following production functions exhibit constant, decreasing or increasing returns to
scale? Show your work.
A. Q=LK³
B. Q=L1/2K 1/4
=
C. Q 10K+5L
D. Q=2K²+L³

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9:15 AM O Y O 65 Micro15 - Saved d. Righiward A_ 15. When returns to scale are decreasing, total output a. Increases b. Deсreases c. Does not change d. Varies IV. Match The term (column B) that best fits the phrases (Column A below. Column A Column B a. Marginal product A_1. Describe the functional relationship of input and output v_2. Production function b. Least-cost combination _C_3, Infinitesimal change c. Isocost line 4. Output yielded from the last unit of input d. isquant 5. TP divided by the number of variable inputs e. Production function 6. Refers to the declining trend to MP f. Counterproductive conditions 7. Illustrates the varied combinations of inputs at the same level of plant capacity g Finite change 8. Contains combinations of inputs that the same budget can purchase given constant prices h. Marginal rate of substitution 9. Price of labor inputs over price of capital inputs i. Economies of scale 10. Ration between output and input j. Diseconomies of scale k. Maximum…