Scenario 25-1.An economy's production form takes the form Y = AF(L,K,H,N).
-Refer to Scenario 25-1.If the production function has the constant-returns-to-scale property,then it could be rewritten as

Question

Quizplus · Accepted Answer

Constant returns to scale imply that doubling all inputs should double output. Therefore, if we double all inputs, we should get an output that is twice the original level. In other words, we get the same amount of output per unit of input. In this case, if we double L, K, H, and N, the output Y should also double. Hence, we can rewrite the production function in terms of output per unit of input, as in answer A.