The Expansion Path for a Constant Returns to Scale Production

question 14

Multiple Choice

The expansion path for a constant returns to scale production function

• A) is a straight line through the origin with a slope greater than one if w > v.
• B) is a straight line through the origin with a slope less than one if w < v.
• C) is a straight line through the origin though its slope cannot be determined by w and v alone.
• D) has a positive slope but is not necessarily a straight line.

---

Definitions:

Compounded Quarterly

Interest calculation method where interest is added to the principal sum so that each following period's interest is calculated on a growing principal.

Annual Interest

The amount of interest to be paid or earned over a one-year period, usually expressed as a percentage of the principal.

Investing

The act of allocating resources, usually money, in order to generate income or profit.

Return

The process of a customer bringing back a purchased product to the seller for a refund, exchange, or credit.