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Which of the Following Statements Is False

Question 31

Multiple Choice

Which of the following statements is false?

A) If all inputs increase by 20% and, as a result, output increases by 20%, it means that the production function exhibits constant returns to scale.
B) If all inputs increase by 20% and, as a result, output increases by more than 20%, it means that the production function exhibits increasing returns to scale.
C) If all inputs increase by 20% and, as a result, output increases by 20%, it means that the production function exhibits constant marginal productivity of labour.
D) If all inputs increase by 20% and, as a result, output increases by less than 20%, it means that the production function exhibits decreasing returns to scale.

Correct Answer: