Assume That N and K Both Increase by 4

question 43

Multiple Choice

Assume that N and K both increase by 4%. The assumption of constant returns to scale implies which of the following?

• A) Output (Y) will increase by 4%.
• B) The capital- labour ratio will increase by 4%.
• C) Y/N will increase by less than 4%.
• D) Y/N will increase by exactly 4%.
• E) Output per capita (Y/N) will not change.

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Definitions:

Wealthy Residents

Individuals or households that possess a significant amount of financial resources, often measured by high income or substantial assets.

Convenience Store

A retail outlet that sells a limited range of household goods and groceries, often open long hours for the convenience of customers.

Warehouse Club

A membership-based retail store offering a wide variety of merchandise, often in bulk, at discounted prices to its members.

Bao

A type of steamed, filled bun or bread-like item in various Chinese cuisines, as well as a name for filled dumplings in Tibetan cuisine.