A Leontief production function is given by f(k,l)=min{k/a,l/b). Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale? A perfect substitutes production function is given by f(k,l)=al+bk. Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale?
A Leontief production function is given by f(k,l)=min{k/a,l/b). Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale? A perfect substitutes production function is given by f(k,l)=al+bk. Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 1.5CE
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A Leontief production function is given by f(k,l)=min{k/a,l/b). Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale?
A perfect substitutes production function is given by f(k,l)=al+bk. Does it exhibit constant returns to scale, increasing returns to scale, or decreasing returns to scale?
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