A Farmer Uses M Units of Machinery and L Hours

question 3

Multiple Choice

A farmer uses M units of machinery and L hours of labor to produce C tons of corn, with the following production function This production function exhibits:

• A) decreasing returns to scale for all output levels.
• B) constant returns to scale for all output levels.
• C) increasing returns to scale for all output levels.
• D) no clear pattern of returns to scale.

---

Definitions:

Interest Rates

The expense incurred when taking out a loan, usually represented as a yearly percentage rate of the principal amount.

Quantitative Easing

Fed purchases of long-term assets to stabilize financial markets, reduce long-term interest rates, and improve the investment environment.

Long-Term Assets

Long-term assets are resources owned by a company projected to provide economic value for more than one fiscal year, such as real estate, machinery, and patents.

Interest Rates

The cost of borrowing money or the return on investment for savings, playing a central role in monetary policy and financial decision-making.