Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,its physical capital,and its human capital,but its technology is unchanged.Which of the following would double?
A)both output and productivity
B)output,but not productivity
C)productivity,but not output
D)neither productivity nor output

Question

Quizplus · Accepted Answer

Since the technology is unchanged, there are no improvements in efficiency or knowledge that could increase productivity, which means there are no increases in productivity. However, output will double because there are double the workers and the physical capital which all lead to higher production levels.

Suppose There Are Constant Returns to Scale