If a Production Function Is Represented as Q = L^aK^b,the

question 80

Multiple Choice

If a production function is represented as q = L^aK^b,the long-run average cost curve will be horizontal as long as

• A) a + b = 0.
• B) a + b = 1.
• C) q > 0.
• D) L = K.

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Definitions:

Credit

The ability of a consumer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Sample

A portion, piece, or segment taken from something larger to represent the quality, style, or nature of the whole.

Merchantability

An implied warranty that goods sold by a merchant are reasonably fit for the general purpose for which they are sold.

Fungible Goods

Items that are interchangeable with others of the same type because they are identical in essence and value, such as grains or precious metals.