If a Production Function Is Represented as Q = L^α

question 13

Multiple Choice

If a production function is represented as q = L^α K^β,the long-run average cost curve will be horizontal as long as

• A)α + β = 0.
• B)α + β = 1.
• C)q > 0.
• D)L = K.

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Definitions:

Environmental Standard

Environmental standard is a guideline or limit placed on levels of pollutants or emissions that activities, industries, or products must comply with to protect the environment.

MSB = MSC

The condition where marginal social benefit equals marginal social cost, often considered the optimal point of resource allocation by economists.

Coal Mine Pollution

Environmental contamination resulting from coal mining activities, including air and water pollution from coal dust and runoff.

Environmental Protection Agency

A government agency in the United States responsible for the protection of human health and the environment by writing and enforcing regulations based on laws passed by Congress.