Assume a Production Function with Constant Returns to Scale

question 10

Multiple Choice

Assume a production function with constant returns to scale.Labor's share of income is 0.7 and capital's share is 0.3.If labor grows at 4% and capital grows at 3%, how many years would it take to double the current level of output if no technological advances are made?

• A)7
• B)10
• C)19
• D)23
• E)33

Recognize the impact of external influences on personal decisions and behaviors.

Understand the importance of attitude accessibility in predicting behavior.

Analyze the role of subjective norms in influencing behaviors.

Understand the concept of behavioral intention and its impact on actual behavior.

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Definitions:

Variable Costing

A costing method that includes only variable production costs (materials, labor, and overhead) in the cost of goods sold and treats fixed overhead costs as period expenses.

Absorption Costing

Absorption costing is an accounting method that includes all of the manufacturing costs in the cost of a product, including both variable and fixed manufacturing overhead.

Produced

Refers to goods that have been completed through the manufacturing process and are ready to be sold or distributed.

Sold

The completed action of transferring ownership of goods or services to a buyer in exchange for payment.