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Suppose the Production Function for Good Q Is Given by Q

Question 3

Multiple Choice

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:

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