The Given Production Function Exhibits Which of the Following

question 4

Multiple Choice

The given production function exhibits which of the following?

• A) constant returns to scale - for every 100% increase in input, there is a 100% increase in output.
• B) decreasing returns to scale - for every 100% increase in input, there is a .675% increase in output.
• C) decreasing returns to scale - for every 100% increase in input, there is a .425% increase in output
• D) increasing returns to scale - for every 100% increase in input, there is a 675% increase in output
• E) increasing returns to scale - for every 100% increase in input, there is a 425% increase in output.

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Definitions:

Cost of Borrowing

The total charges, including interest and any other fees, that a borrower incurs when taking out a loan.

After-Tax Cost

The expense of an expenditure or investment after accounting for the effects of taxes.

Operating Lease

A lease agreement allowing a company to use an asset without ownership, often with shorter terms compared to a finance lease.

Lessor

A lessor is an entity that leases an asset to another party, known as the lessee, typically under a lease agreement.