A Firm Has a Production Function F(x, Y) = 1

question 18

Multiple Choice

A firm has a production function f(x, y) = 1.80(x^0.80 + y^0.80) 2 whenever x > 0 and y > 0. When the amounts of both inputs are positive, this firm has

• A) decreasing returns to scale.
• B) constant returns to scale.
• C) increasing returns to scale if x + y > 1 and decreasing returns to scale otherwise.
• D) increasing returns to scale.
• E) increasing returns to scale if output is less than 1 and decreasing returns to scale if output is greater than 1.

---

Definitions:

β-diketone

A type of organic compound containing two keto (carbonyl) groups separated by a carbon atom, often depicted as RC(=O)CH2C(=O)R'.

Enols

Molecules containing a hydroxyl group attached to a carbon atom that is double-bonded to another carbon atom.

Organic Product

A compound or substance resulting from the chemical reactions involving organic molecules.

Enol

An organic compound containing a hydroxyl group directly connected to a carbon-carbon double bond, often in equilibrium with its keto form.