The production function $q = k ^ { .6 } l ^ { .5 }$ exhibits
A)increasing returns to scale and diminishing marginal products for both K and L.
B)increasing returns to scale and diminishing marginal product for L only.
C)increasing returns to scale but no diminishing marginal productivities.
D)decreasing returns to scale.

Question

Quizplus · Accepted Answer

The production function $q = k^{0.6} l^{0.5}$ has exponents that sum to 1.1 (0.6 + 0.5), indicating increasing returns to scale. Both exponents are less than 1, indicating diminishing marginal products for both K and L.

The Production Function q=k.6l.5q = k ^ { .6 } l ^ { .5 }q=k.6l.5

The Production Function $q = k ^ { .6 } l ^ { .5 }$