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

question 30

Multiple Choice

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

• A).multiply capital by z
• And labor by z , we multiply output by z .
• 1 2 3
• B)increase capital and labor by 10 percent each, we increase output by 10 percent.
• C)increase capital and labor by 5 percent each, we increase output by 10 percent.
• D)increase capital by 10 percent and increase labor by 5 percent, we increase output by 7.5 percent.

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Definitions:

Cash Received

The amount of money that an entity collects, typically from operating activities such as sales of goods or services.

Liability Recorded

Recording a business's liabilities or money owed in its financial statements.

Prepaid Expenses

Expenses paid in advance for goods or services, which are recorded as assets on a balance sheet until they are consumed or used.

Asset Account

Represents items of value owned or controlled by a company that are expected to provide future economic benefits.