Consider the Aggregate Production Function Y = F(K, L)

question 22

Multiple Choice

Consider the aggregate production function Y = F(K, L) . If the inputs K and L are increased by 5 percent each and total output (Y) increases by 5 percent as a result, then this production function is displaying

• A)diminishing marginal returns.
• B)a change in technology.
• C)constant returns to scale.
• D)increasing returns to scale.
• E)decreasing returns to scale.

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Definitions:

Contingency Table

A table often used in statistics to display the frequency distribution of variables, enabling a visual inspection of the relationship between them.

Qualitative Variables

Variables that express descriptive or categorical attributes and cannot naturally be represented by a numerical value.

Chi-Square Test

The Chi-Square Test is a statistical test used to determine if there is a significant difference between expected frequencies and observed frequencies in one or more categories.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or to the final calculation of a statistic without violating any constraints.