« previous next »

Author Question: Cobb-Douglas production functions can never possess varying returns to scale. Indicate whether ... (Read 21 times)

BrownTown3

  • Hero Member
  • *****
  • Posts: 564
on: Jul 1, 2018
Cobb-Douglas production functions can never possess varying returns to scale.
 
  Indicate whether the statement is true or false

Question 2

A firm is currently producing 100 widgets using 4 units of labor and 12 units of capital. The firm's production function exhibits constant returns to scale. How many units of labor and capital are needed to produce 350 widgets?
 
  A) L = 14; K = 42
  B) L = 15; K = 45
  C) L = 14; K = 44
  D) L = 15; K = 42
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


covalentbond

  • Sr. Member
  • ****
  • Posts: 336
Reply #1 on: Jul 1, 2018
Answer to Question 1

True . The Cobb-Douglas function takes the form q = L K, where the exponents are constant parameters. The returns to scale equals  +  which is constant for all q.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

Did you know?

There can actually be a 25-hour time difference between certain locations in the world. The International Date Line passes between the islands of Samoa and American Samoa. It is not a straight line, but "zig-zags" around various island chains. Therefore, Samoa and nearby islands have one date, while American Samoa and nearby islands are one day behind. Daylight saving time is used in some islands, but not in others—further shifting the hours out of sync with natural time.

How to find an unknown angle using reciprocal trigonometric functions How to find an unknown angle using reciprocal trigonometric functions
Production of monoclonal antibodies Production of monoclonal antibodies
As a result of a hole in the graph, which of the following functions does not have an average ... As a result of a hole in the graph, which of the following functions does not have an average ...
Stomach functions Stomach functions
Organs of the human male reproductive system, their functions, and locations. Organs of the human male reproductive system, their functions, and locations.
Nonshivering heat production Nonshivering heat production
Video: Cellular slime mold life cycle Animation

For a complete list of videos, visit our video library