The production function of a firm is given by , where , and denote quantities of output, input 1 and input 2 respectively. The production function exhibits
Tap an option to check your answer.
1 mark, −0.25MicroeconomicsProduction and returns to scaleReturns to scale and homogeneityEasyabout 1 min
JNU SSS 2011 Question 32: Production and returns to scale
Answer and worked solution
Checking your account…
Plain-text version
The production function of a firm is given by Q = X^(1/3)Y, where Q, X and Y denote quantities of output, input 1 and input 2 respectively. The production function exhibits (A) constant returns to scale (B) increasing returns to scale (C) decreasing returns to scale (D) None of the above
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.
TestStop has 20 past-paper questions on this subtopic.
Similar questions from other papers
- Given below are two statements: Assertion A: There are increasing return to scale, if output become more than doubles when inputs are doubled. Reason R: Large scale of…
- Identify the CORRECT relationship(s) between the average product of labour (AP_L) and marginal product of labour (MP_L) in the short-run.
- In Cobb-Douglas production function Q = A x₁^α · x₂^β · u; A denotes here:
- Assuming that the production function is homogeneous of degree one and Euler's equation holds, if MP_L (marginal product of labour) is greater than AP_L (average…
- For a Cobb-Douglas production function with two inputs, Q = AK^αL^β where A > 0 and α, β > 0, the marginal products are: A. MP_K = α/KQ B. MP_K = β/KQ C. MP_L = α/LQ D
Question from the JNU SSS 2011 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.