A Firm Has the Production Function F(x₁, X₂) = (X^b₁

question 42

Multiple Choice

A firm has the production function f(x₁, x₂) = (x^b₁ + x_b²) c, where b > 0 and c > 0. This firm will have

• A)Increasing returns to scale if and only if 2b + c > 1.
• B)Increasing returns to scale if and only if bc > 1.
• C)Increasing returns to scale if and only if b + c > 1.
• D)Constant returns to scale if and only if c = 1.

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Definitions:

Trichomes

Small hair-like appendages on plants that serve various functions including defense against insects and reducing water loss.

Collenchyma

A type of plant tissue characterized by its living, elongated cells with unevenly thickened walls that provide structural support.

Xylem

A type of vascular tissue in plants that transports water and dissolved nutrients from the roots to the rest of the plant.

Maturation

The process of becoming mature, involving growth and development in organisms or the aging of beverages and cheeses to enhance flavor.