Suppose the production function for good q is given by q = 3K + 2 L where K and L are capital and labour inputs. Consider three statements about this function: I. The function exhibits constant returns to scale.
II) The function exhibits diminishing marginal productivities to all inputs.
III) The function has a constant rate of technical substitution.
Which of these statements is true?
A) All of them.
B) Only I.
C) I and II but not III.
D) I and III but not II.
Correct Answer:
Verified
Q1: If both land and labour costs increased
Q2: As a result of doubling all its
Q4: The marginal rate of technical substitution is
Q5: A production function may exhibit
A) Constant returns
Q6: The isocost line measures the different combination
Q7: Trying to maximize output and minimize costs
Q8: The low-cost input combination is the point
Q9: There are an infinite number of isocost
Q10: A production isoquant is a function that
Q11: Any point where the isocost line cuts
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