Which of the Following Production Functions Exhibits Constant Returns to Scale

question 74

Multiple Choice

Which of the following production functions exhibits constant returns to scale?

• A) q = KL
• B) q = KL^0.5
• C) q = K + L
• D) q = log(KL)

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Definitions:

Sales Dollars

The total monetary amount generated from selling goods or services.

Asset Management

The systematic process of developing, operating, maintaining, and selling assets in a cost-effective manner.

Depreciation Expense

Depreciation Expense represents the systematic allocation of the cost of a tangible asset over its useful life, reflecting its wear and tear or obsolescence.

Contra-Asset

A contra-asset account is an asset account where the balance of the account is either zero or a credit balance, used to reduce the value of the related asset, such as accumulated depreciation for fixed assets.