Consider the CES Production Function $Q = \left[ a L ^ { \frac { \sigma - 1 } { \sigma } } + b K ^ { \frac { \sigma - 1 } { \sigma } } \right] ^ { \frac { \sigma} { \sigma - 1 } }$

question 50

Multiple Choice

Consider the CES production function $Q = \left[ a L ^ { \frac { \sigma - 1 } { \sigma } } + b K ^ { \frac { \sigma - 1 } { \sigma } } \right] ^ { \frac { \sigma} { \sigma - 1 } }$

. This production function exhibits

• A) decreasing returns to scale.
• B) constant returns to scale.
• C) increasing returns to scale.
• D) either decreasing or constant returns to scale, but more information is needed to determine which one.

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Definitions:

Introducing New Species

The act of bringing a species into an ecosystem where it does not naturally occur, potentially disrupting local ecosystems.

Population Change Curve

A graph that shows how the size of a population changes over time.

Volatile

Characterized by rapid and unpredictable changes or fluctuations, often used to describe chemical substances that easily vaporize at normal temperatures or financial markets prone to rapid changes.

R-Selected Species

Species that produce a large number of offspring with a low probability of survival into adulthood, often adapting to unstable environments.