Which of the Following Production Functions Exhibit Constant Returns to Scale

question 6

Multiple Choice

Which of the following production functions exhibit constant returns to scale? In each case y is output and K and L are inputs.(1) y = K^1/2 L^1/3.(2) y = 3K^1/2 L^1/2.(3) y = K^1/2 + L^1/2.(4) y = 2K + 3L.

• A)1, 2, and 4
• B)2, 3, and 4
• C)1, 3, and 4
• D)2 and 3
• E)2 and 4

---

Definitions:

Market

A system or arena in which commercial dealings are conducted, or where supply meets demand.

Equilibrium Quantity

The level of output at which demand and supply in the market balance perfectly, setting the stage for stable prices unless external factors intervene.

Demand Schedule

A table or graph showing the quantity of a good that consumers are willing to purchase at various prices.

Supply Schedule

A table or graph that shows the quantity of goods that producers are willing and able to supply at various prices over a specified period.