Given constant returns to scale between labor and output,if it takes 1 hour to make 10 yards of cloth,then 100 yards of cloth can be made in
A)10 hours.
B)100 hours.
C)1000 hours.
D)Can't tell without knowing how much capital is used.

Question

Quizplus · Accepted Answer

Under constant returns to scale, doubling inputs (in this case, labor hours) doubles output. Therefore, if 1 hour produces 10 yards, 10 hours would produce 100 yards.

Given Constant Returns to Scale Between Labor and Output,if It