Table 7-4
-The production relationship in Table 7-4 indicates a process characterized by
A)decreasing returns to scale.
B)constant returns to scale.
C)increasing returns to scale.
D)increasing then decreasing returns to scale.

Question

Table 7-4  
-The production relationship in Table 7-4 indicates a process characterized by
A)decreasing returns to scale. 
B)constant returns to scale. 
C)increasing returns to scale. 
D)increasing then decreasing returns to scale.

Quizplus · Accepted Answer

The production relationship in Table 7-4 is characterized by constant returns to scale since the output (Q) increases proportionally to the inputs (K and L). There is no significant difference in the marginal product of each additional unit of input as the quantity of inputs change.