If the Sum of the Powers Associated with the Inputs

question 2

Multiple Choice

If the sum of the powers associated with the inputs in a Cobb-Douglas production function exceeds 1,the production function is characterized by:

• A)constant returns to scale.
• B)decreasing returns to scale.
• C)increasing returns to scale.
• D)diminishing returns to all inputs.

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Definitions:

Fair Value

The monetary return from asset divestiture or the financial responsibility for liability transfer occurring in an organized marketplace exchange at the valuation juncture.

Book Value

Book Value is the value of an asset as recorded on the company's balance sheet, representing the asset's cost minus accumulated depreciation or amortization.

Deferred Tax Asset

An accounting term used to describe a situation where a company has paid more taxes to the government than it has shown as an expense in its financial statements, which can be used to reduce future tax liability.

Capital Cost Allowance

A tax deduction available in some jurisdictions for tangible and intangible assets, allowing businesses to write off the cost of assets over their useful life.