Table 7-4 shows the shows the quantities of labor and capital required to produce various levels of output.
Table 7-4 $$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity of } \
\text { Capital }
\end{array} & \begin{array} { c }
\text { Quantity } \
\text { of Labor }
\end{array} & \text { Output } \
\hline 6 & 2 & 40 \
\hline 12 & 4 & 100 \
\hline 24 & 8 & 220 \
\hline 48 & 16 & 440 \
\hline 96 & 32 & 800 \
\hline
\end{array}$$
-Refer to Table 7-4.When the firm increases production from 24 units of capital and 8 units of labor to 48 units of capital and 16 units of labor,the production function exhibits:
A)decreasing marginal rate of technical substitution.
B)constant returns to scale.
C)increasing returns to scale.
D)diminishing marginal returns

Question

Table 7-4 shows the shows the quantities of labor and capital required to produce various levels of output.
Table 7-4 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity of } \
\text { Capital }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { of Labor }
\end{array} & \text { Output } \
\hline 6 & 2 & 40 \
\hline 12 & 4 & 100 \
\hline 24 & 8 & 220 \
\hline 48 & 16 & 440 \
\hline 96 & 32 & 800 \
\hline
\end{array}$$
-Refer to Table 7-4.When the firm increases production from 24 units of capital and 8 units of labor to 48 units of capital and 16 units of labor,the production function exhibits:
A)decreasing marginal rate of technical substitution.
B)constant returns to scale.
C)increasing returns to scale.
D)diminishing marginal returns

Quizplus · Accepted Answer

The production function exhibits constant returns to scale because doubling both inputs (capital and labor) from 24 and 8 to 48 and 16 results in exactly doubling the output from 220 to 440.

Table 7-4 Shows the Shows the Quantities of Labor and Capital