The Production Function Feature Called "Constant Returns to Scale" Means

question 29

Multiple Choice

The production function feature called "constant returns to scale" means that if we:

• A)multiply capital by z₁ and labour by z₂, we multiply output by z₃.
• B)increase capital and labour by 10 percent each, we increase output by 10 percent.
• C)increase capital and labour by 5 percent each, we increase output by 10 percent.
• D)increase capital by 10 percent and increase labour by 5 percent, we increase output by 7.5 percent.

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired: a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Desensitization

The diminished emotional responsiveness to a negative, aversive, or positive stimulus after repeated exposure to it.

Modeling

A method of learning that involves observing and replicating others' behaviors, attitudes, or emotional expressions.