Assume the generic production function Q = f (K,L) displays both decreasing returns to capital (K) and decreasing returns to labor (L). Then
A. this production function may display increasing returns to scale.
B. this production function will certainly display constant returns to scale.
C. this production function will certainly display decreasing returns to scale.
D. this production function will certainly display increasing returns to scale.
Answer: A
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Buyers' expenditures and sellers' revenues are always identical
a. True b. False Indicate whether the statement is true or false
The division of labor helps to explain why: a. consumers need not have a deep knowledge of the goods they consume
b. consumers can only consume those goods of which they have an in-depth knowledge. c. domestic industries need protection from foreign competition. d. government intervention is required for the market to work efficiently.
The Federal Open Market Committee consists of
A) the seven member Board of Governors of the Federal Reserve. B) the 12 Federal Reserve Bank Presidents. C) five of the Federal Reserve Bank Presidents. D) the Board of Governors plus five of the Federal Reserve Bank Presidents.
Consider the purely competitive firm pictured below. The firm is earning:
A. Normal profits, since its price is above AVC
B. Economic profits, since its price is above AVC
C. Normal profits, since its price just covers ATC
D. Losses, since it is operating at the shutdown point