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Production Function: TP, MP and AP · Question 57 of 62

All inputs are doubled.

Question 57

MediumOriginal question

All inputs are doubled. Match each result with its name.

List IList II
A. Output rises from 100 to 250I. Constant returns to scale
B. Output rises from 100 to 200II. Not a returns-to-scale case: one input changed
C. Output rises from 100 to 160III. Increasing returns to scale
D. Only labour doubles and output rises from 100 to 160IV. Decreasing returns to scale
Options for question 57

Show the answer and explanation
CorrectNot quiteAnswer D

Correct answer: D

Explanation

  1. 250 is more than double: increasing; 200 is exactly double: constant; 160 is less: decreasing.

  2. If only labour doubles, it is a question of returns to a factor, not of scale.

Concept
Classifying returns
Typical time
90 s
Your time
—
The rule this testsReturns to scale
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