MCQ

1)Consider the following production function with only one factor of production, capital: Y = AK. This production function has which of the following features:A.diminishing marginal returns but not constant returns to scale

• B.constant returns to scale and increasing marginal returns
• C.constant returns to scale but not diminishing marginal returns
• D.constant returns to scale and diminishing marginal returns

2)war has wrecked the economy of Moldova. Assume that both the capital stock and the workforce have been reduced by 50% while there is no change in the population size. If the economy's production function has constant returns to scale, how will the postwar level of output per worker compare to the prewar level?A.it will be higher

• B.it will remain the same
• C.it could be either lower or higher
• D.it will be lower