Suppose the Production Function for Good Q Is Given by Q

question 14

Multiple Choice

Suppose the production function for good q is given by q = 3K + 2 L where K and L are capital and labour inputs. Consider three statements about this function: I. The function exhibits constant returns to scale.
II) The function exhibits diminishing marginal productivities to all inputs.
III) The function has a constant rate of technical substitution.
Which of these statements is true?

• A) All of them.
• B) Only I.
• C) I and II but not III.
• D) I and III but not II.

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Definitions:

Demand

The amount of a product or service that buyers are ready and able to buy at different prices over a specified time frame.

Supply

The total amount of a specific good or service available for purchase at any given time.

Wheat Farmer

An individual or entity engaged in the cultivation of wheat as a commercial agricultural activity.

Weather

The state of the atmosphere at a particular place and time, encompassing conditions such as temperature, precipitation, and wind.