For q = 2L^0.3 K^0.5, doubling both inputs

doubles output: constant returnsCorrect answerYour answermore than doubles output: increasing returnsCorrect answerYour answerraises output by less than double: decreasing returns to scaleCorrect answerYour answerleaves output unchangedCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

The exponents add to 0.3 + 0.5 = 0.8, less than 1.
Output rises by 2^0.8 ≈ 1.74 times: less than double. The constant 2 in front does not affect returns to scale.

Concept: Decreasing returns from exponents
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsReturns to scale

Practise this chapter →

Ten questions from Production Function: TP, MP and AP, at your own pace.

Practise this chapter →

Ten questions from Production Function: TP, MP and AP, at your own pace.

Practise this chapter All 62 questions in Production Function: TP, MP and AP Revise the notes for Production Function: TP, MP and AP

For q = 2L^0.3 K^0.5, doubling both inputs

Explanation