Suppose the production of paved roadways can be represented as q = L^0.5 + K^0.5.Which of the following statements is (are)TRUE?

Question

Quizplus · Accepted Answer

A) The production function includes labor as a variable with a power of 1, and capital as a variable with a power of 0.5. This implies that labor is subject to diminishing marginal productivity in the short run.
B) Both labor and capital are included in the production function, but they are not perfect substitutes since they have different exponents.
C) The isoquants for paved roadways are convex because of the diminishing marginal productivity of both labor and capital. As more of one input is added, the marginal productivity of that input will eventually decrease and more of the other input will be needed to compensate for the decrease in productivity. This leads to a curved isoquant.

Suppose the Production of Paved Roadways Can Be Represented as Q