📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

      If a Cobb-Douglas production is Q = K0.4

    L0.6 the function is
    A Increasing return to scale Correct Answer Incorrect Answer
    B Decreasing return to scale Correct Answer Incorrect Answer
    C First increasing and the decreasing return to scale Correct Answer Incorrect Answer
    D Constant return to scale Correct Answer Incorrect Answer
    E Can not be identified Correct Answer Incorrect Answer

    Solution

    Q = K0.4 L0.6 Increase inputs by l Q = ( l K)0.4 ( l L)0.6 = l K0.4 L0.6 = l Q So, output also increases by the same amount. Hence, Constant returns to scale

    Practice Next
    More Research Questions