A production function of the form $Y = K ^ { 2 } L ^ { 1 - a }$
exhibits constant returns to scale.

Name: A production function of the form $Y = K ^ { 2 } L ^ { 1 - a }$ exhibits constant returns to scale.
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Question

A production function of the form $Y = K ^ { 2 } L ^ { 1 - a }$ 
exhibits constant returns to scale.

Quizplus · Accepted Answer

The production function exhibits constant returns to scale because doubling both capital and labor inputs will double output. This is because the exponent sum of K and L is 1, which means that a proportional change in both inputs will result in the same proportional change in output.

A Production Function of the Form Y=K2L1−aY = K ^ { 2 } L ^ { 1 - a }Y=K2L1−a

A Production Function of the Form $Y = K ^ { 2 } L ^ { 1 - a }$