For each of the following functions, describe returns to scale.
1. Q = K + L
2. Q = K1/2L3/4
3. Q = K2L
Ans:
1. Constant returns to scale.
2. Decreasing returns to scale.
3. Increasing returns to scale.
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Which of the following is not a reason why government programs might fail to achieve their goals?
a. Insufficient information to correctly achieve the goal. b. One policy goal is in direct conflict with another policy goal. c. Politicians respond to political incentives to deviate from the goal. d. Inability to use coercion to achieve the goal.
Which of the following statements best describes a production function?
A) the maximum profit generated from given levels of inputs B) the maximum level of output generated from given levels of inputs C) all levels of output that can be generated from given levels of inputs D) all levels of inputs that could produce a given level of output
Total surplus = Value to buyers - Costs to sellers
a. True b. False Indicate whether the statement is true or false
________________________: price concessions from the seller, the expected cost of expenditures must be added to the observed transaction price, if, in fact, the expenditures were made after the acquisition.
Fill in the blank(s) with the appropriate word(s).