Doubling the Amount of L and K Under Constant Returns

question 10

Multiple Choice

Doubling the amount of L and K under constant returns to scale does all of the following except:

• A) doubles the output of the L-intensive commodity
• B) doubles the output of the K-intensive commodity
• C) leaves output unchanged.
• D) leaves the shape of the production frontier unchanged

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Definitions:

Common Stock

Shares of ownership in a corporation, granting holders voting rights and a portion of profits in the form of dividends.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders’ equity at a specific moment, showing the company's financial position.

Wages Payable

The total amount of wages that a company owes to its employees for work that has been completed but not yet paid for.

Common Stock

Common stock represents units of ownership interest or equity in a corporation and usually comes with voting rights to elect the board of directors.