The Blackberry production function indicated in the text is

Qequals$=2\mathrm{.}83$ Upper L Superscript $1\mathrm{.}52$ Baseline Upper K Superscript $0\mathrm{.}822\mathrm{.}83$L$1\mathrm{.}52$K$0\mathrm{.}82,$

where L is labor and K is capital. Epple at al$.(2010)$ estimate that the production function for U$.$S$.$ housing is

Qequals$=1\mathrm{.}38$ Upper L Superscript $0\mathrm{.}144$ Baseline Upper M Superscript $0\mathrm{.}8561\mathrm{.}38$L$0\mathrm{.}144$M$0\mathrm{.}856,$

where L is land and M is an aggregate of all other$$ mobile, nonland$$ factors, which we call materials. Haskel and Sadun$(2012)$ estimate the production function for UK supermarkets is

Qequals$=$Upper L Superscript $0\mathrm{.}23$ Baseline Upper K Superscript $0\mathrm{.}10$ Baseline Upper M Superscript $0\mathrm{.}66$L$0\mathrm{.}23$K$0\mathrm{.}10$M$0\mathrm{.}66,$

where L is$$ labor, K is$$ capital, and M is materials. What kind of returns to$$ scale, g$,$ do these production functions$$ exhibit?

Part $2$

The production function

Qequals$=2\mathrm{.}83$ Upper L Superscript $1\mathrm{.}52$ Baseline Upper K Superscript $0\mathrm{.}822\mathrm{.}83$L$1\mathrm{.}52$K$0\mathrm{.}82$

Part $3$

A$.$

exhibits increasing returns to scale if L and K are greater than one.

B$.$

exhibits decreasing returns to scale if L and K are less than one.

C$.$

always exhibits increasing returns to scale.

D$.$

always exhibits constant returns to scale.

E$.$

always exhibits decreasing returns to scale.