The production function :
A)exhibits constant returns to scale and constant marginal productivities for k and l.
B)exhibits diminishing returns to scale and diminishing marginal productivities for k and l.
C)exhibits constant returns to scale and diminishing marginal productivities for k and l.
D)exhibits diminishing returns to scale and constant marginal productivities for k and l.

Question

The production function :
A)exhibits constant returns to scale and constant marginal productivities for k and l. 
B)exhibits diminishing returns to scale and diminishing marginal productivities for k and l. 
C)exhibits constant returns to scale and diminishing marginal productivities for k and l. 
D)exhibits diminishing returns to scale and constant marginal productivities for k and l.

Quizplus · Accepted Answer

The production function exhibits constant returns to scale, which means that if both inputs are increased by the same proportion, then the output will increase by the same proportion. However, it exhibits diminishing marginal productivities for both k and l, which means that as each input is increased while holding the other input constant, the marginal product of that input eventually decreases.

The Production Function