The expansion path for a homothetic production function: A)is a straight line through the origin with a slope greater than one if w v. B)is a straight line through the origin with a slope less than one if w

Question

The expansion path for a homothetic production function:
A)is a straight line through the origin with a slope greater than one if w > v.
B)is a straight line through the origin with a slope less than one if w < v .
C)is a straight line through the origin though its slope cannot be determined by w and v alone.
D)has a positive slope but is not necessarily a straight line.

Quizplus · Accepted Answer

The expansion path for a homothetic production function is a straight line through the origin, but its slope depends on the ratio of input prices and the specific form of the production function, not just on the variables w and v alone.

The Expansion Path for a Homothetic Production Function