A Firm Has the Production Function F(x, Y) = X¹

question 38

Multiple Choice

A firm has the production function f(x, y) = x^1.40y^0.90. This firm has

• A) decreasing returns to scale and increasing marginal product for factor x.
• B) constant returns to scale.
• C) increasing returns to scale and decreasing marginal product of factor x.
• D) decreasing returns to scale and diminishing marginal products for factor x.
• E) None of the above.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another currency.

Honduras

A country located in Central America, characterized by its rich culture, historical sites, and a diverse landscape that includes mountains, rainforests, and coastal beaches.

Nicaragua

A country located in Central America, known for its significant cultural heritage, geography, and political history.

Self-sufficient

The capacity of an individual, household, or community to meet their needs and sustain themselves without external assistance.