Let the Production Function Be Q = AL^aK^b

question 77

Multiple Choice

Let the production function be q = AL^aK^b.The function exhibits increasing returns to scale if

• A) a + b = 1.
• B) a + b > 1.
• C) a + b < 1.
• D) Cannot be determined with the information given.

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Definitions:

Queuing System

The method by which queues of customers or items are managed by an entity, focusing on order service, wait times, and allocation of resources.

Utilization Rate

The percentage of capacity or capability that is being used effectively at a given time.

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events happen with a known constant rate and independently of the time since the last event.

Service Rate

The speed at which a service provider can complete work or deliver services, often measured in customers served per unit of time or tasks completed per day.