If a production function is expressed in a linear form, the inputs used in the production process:
A) are perfect complements.
B) are perfect substitutes.
C) have to be increased in the same proportion.
D) have fixed marginal costs.
E) have equal marginal productivity.

Question

Quizplus · Accepted Answer

If a production function is expressed in a linear form, it means that the inputs used in the production process are perfect substitutes, meaning that an increase in the quantity of one input can fully offset a decrease in the quantity of the other input without affecting the level of output. This allows for a constant marginal rate of substitution between the two inputs, leading to a linear production function.

If a Production Function Is Expressed in a Linear Form