With a Cobb-Douglas Technology, When α+ β= 1, We Have

question 6

Multiple Choice

With a Cobb-Douglas technology, when α+ β= 1, we have

• A) constant returns to scale
• B) increasing returns to scale
• C) decreasing returns to scale

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Definitions:

Investment

Allocating financial assets in hopes of achieving a return or profit.

Inventory

The raw materials, work-in-progress products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Gross Domestic Product (GDP)

A measure of the total economic production of a country, representing the total value of all goods and services produced over a specific time period.

Investment

The process of distributing funds with the aim of earning revenue or gains.