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Questions › UoH › UoH 2018 › Q63
1 mark, −0.33Microeconomics › Production and returns to scale › Returns to scale and homogeneityEasyabout 1 min

UoH 2018 Question 63: Production and returns to scale

Which of the following is true with respect to the production function Y=ALαK1−αY = AL^{\alpha}K^{1-\alpha}Y=ALαK1−α, (where α\alphaα is between 0 and 1)?

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Plain-text version

Which of the following is true with respect to the production function Y = AL^αK^(1-α), (where α is between 0 and 1)? (A) production function Increasing Return to scale (B) diminishing Return to scale (C) it is a homogeneous production function of degree One (D) it is a homogeneous production function of degree zero

Also written as: Which of the following is true with respect to the production function Y = AL^(alpha)K^(1-alpha), (where alpha is between 0 and 1)?

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 UoH 2018 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.