If Production Is Given by Q = K ^$\alpha$ L^B $\alpha$ + B < 1)doubling Both Inputs
A) More Than Doubles

question 3

Multiple Choice

If production is given by Q = K ^$\alpha$ L^B,( $\alpha$ + B < 1) doubling both inputs

• A) more than doubles output.
• B) exactly doubles output.
• C) increases output but does not double it.
• D) leaves output unchanged.

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Definitions:

Expected Value

The weighted average of all possible values of a random variable, with weights being their respective probabilities.

Probability

A measure quantifying the likelihood of a specific event occurring, often expressed as a number between 0 and 1.

Von Neumann-Morgenstern Utility Function

A utility function that assumes individuals can rank their preferences under uncertainty, used in expected utility theory to describe choices.

Insurance

A financial product that provides protection against financial loss or harm, in exchange for the payment of a premium.