Author Question: The following is a Cobb-Douglas production function: Q = 1.75K0.5L0.5 . What is correct here? a. A ... (Read 122 times)

soccerdreamer_17 · **on:** Jul 1, 2018

The following is a Cobb-Douglas production function: Q = 1.75K0.5L0.5 . What is correct here?
a. A one-percent change in L will cause Q to change by one percent
b. A one-percent change in K will cause Q to change by two percent
c. This production function displays increasing returns to scale
d. This production function displays constant returns to scale
e. This production function displays decreasing returns to scale

Question 2

Once a division manager sees that production goal for a time period is likely to be met
a. he has an incentive to increase the pace of production
b. he has an incentive to decrease the pace of production
c. he does not have an incentive to change the pace of production
d. he has an incentive to produce other products