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Questions › IIT JAM › IIT JAM 2024 › Q26
2 marks, −0.667Microeconomics › Production and returns to scale › Returns to scale and homogeneityModerateabout 1 min

IIT JAM 2024 Question 26: Production and returns to scale

Consider the production function Q(K,L)=(2K+3L)2Q(K,L) = (2\sqrt{K} + 3\sqrt{L})^2Q(K,L)=(2K​+3L​)2 where QQQ is output, KKK is capital, and LLL is labour. If ηK\eta_KηK​ and ηL\eta_LηL​ denote the output elasticities with respect to capital and labour, then the value of (ηK+ηL)(\eta_K + \eta_L)(ηK​+ηL​) is

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Consider the production function Q(K,L) = (2√K + 3√L)² where Q is output, K is capital, and L is labour. If η_K and η_L denote the output elasticities with respect to capital and labour, then the value of (η_K + η_L) is (A) 2 (B) 1 (C) 4 (D) 0.5

Also written as: Consider the production function Q(K,L) = (2sqrt(K) + 3sqrt(L))^2 where Q is output, K is capital, and L is labour. If eta_K and eta_L denote the output elasticities with respect to capital and labour, then the value of (eta_K + eta_L) is

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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Question from the IIT JAM 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.