Question: Q 1. 3i!!! 'IJ a) Define increasing returns to scale. (2 points) b) Define decreasing returns to scale. (2 points) us i c) Consider the

Q 1. 3i!!! 'IJ a) Define increasing returns to scale. (2 points) b) Define decreasing returns to scale. (2 points) us i c) Consider the production function {0... K) = 2K - L1 5 + min{3L, 7k}. Does the long-run cost function of a rm operating with this technology satisfy increasing or decreasing returns to scale? (2 points) Explain your answer. (4 points)

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