If a Production Function is given as , where , the function is said to display
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4 marks, −1MicroeconomicsProduction and returns to scaleReturns to scale and homogeneityEasyabout 1 min
CUET-PG 2024 Question 2: Production and returns to scale
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If a Production Function is given as Q(x,y) = A x^a y^b, where (a + b) = 2, the function is said to display (A) Decreasing returns to scale (B) Constant returns to scale (C) Increasing returns to scale (D) Zero returns to scale
Production and returns to scale has come up 92 times in 6 exams since 2007.
What this question tests
This question is on Returns to scale and homogeneity, part of Production and returns to scale in Microeconomics.
How output changes when all inputs scale up, including Euler's theorem and the degree of homogeneity.
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