If Output Is Produced According to Q = (KL)^3/4,then This

question 17

Multiple Choice

If output is produced according to Q = (KL) ^3/4,then this production process exhibits:

• A) increasing returns to scale.
• B) decreasing returns to scale.
• C) first increasing and then decreasing returns to scale.
• D) constant returns to scale.
• E) first decreasing and then increasing returns to scale.

---

Definitions:

Prime Rate

The interest rate banks charge their largest and best commercial customers.

Compensating Balances

Minimum balance requirements imposed by banks on corporate customers in exchange for banking services or loans.

Trust Receipts

Documents acknowledging the receipt of goods by a trustee while detailing the terms of an agreement for selling or holding the goods.

Collateral

An asset backing a loan. In the event of default the collateral becomes the property of the lender to satisfy the obligation. Also called security for the loan.