Suppose the production function for good q is given by q = 3k + 2l where k
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Question:
Suppose the production function for good q is given by q = 3k + 2l where k and l are capital and labor inputs. Consider three statements about this function: I. The function exhibits constant returns to scale. II. The function exhibits diminishing marginal productivities to all inputs. III. The function has a constant rate of technical substitution. Which of these statements is true? (please give the explanation and answer)
(a) All of them
(b) None of them
(c) I and II, but not III
(d) I and III, but not II
Expert Answer:
Returns to scale Q 3K 2L We will increase both K and L by m and create a new production functi... View the full answer
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