Consider the production function .The is
A) 2.00
B) 1.50
C) 1.00
D) 0.50

Question

Consider the production function  .The  is
A) 2.00 
B) 1.50 
C) 1.00 
D) 0.50

Quizplus · Accepted Answer

According to the production function, doubling the amount of labor (and holding capital constant) results in a doubling of output. This indicates constant returns to scale, meaning that doubling the inputs (labor and capital) will result in a doubling of output. Therefore, the best choice is to increase both labor and capital by the same proportion, so the answer is A) 2.00.

Consider the Production Function .The Is