A Firm Has the Production Function F(x, Y)=x¹

question 31

Multiple Choice

A firm has the production function f(x, y) =x^1.40y^0.90.This firm has

• A)decreasing returns to scale and increasing marginal product for factor x.
• B)constant returns to scale.
• C)increasing returns to scale and decreasing marginal product of factor x.
• D)decreasing returns to scale and diminishing marginal products for factor x.
• E)None of the above.

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Definitions:

Contracts

Legally binding agreements between two or more parties that outline terms, conditions, and obligations of each party.

Conceptual Framework

A theoretical structure that outlines the objectives and fundamentals of financial reporting to guide the development of accounting standards.

Income

Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Gains

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases in liabilities that result in increases in equity, other than those related to contributions from equity participants.