Which of the following production functions exhibits constant returns to scale?
A) $Y = K ^ { 2 / 3 }$
B) $Y = K ^ { 1 / 3 } L ^ { 1 / 3 }$
C) $Y = K ^ { a } L ^ { 1 - a }$
D) $Y = K ^ { 1 / 4 } L ^ { 1 / 2 }$
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

A production function exhibits constant returns to scale if, when all inputs are scaled by a constant factor, the output is scaled by the same factor. In option C, the exponents of K and L sum to 1 (a + (1-a) = 1), indicating constant returns to scale.

Which of the Following Production Functions Exhibits Constant Returns to Scale