The Following Is a Cobb-Douglas Production Function: Q = 1

question 26

Multiple Choice

The following is a Cobb-Douglas production function: Q = 1.75K^0.5·L^0.5.What is correct here?

• A) A one-percent change in L will cause Q to change by one percent
• B) A one-percent change in K will cause Q to change by two percent
• C) This production function displays increasing returns to scale
• D) This production function displays constant returns to scale
• E) This production function displays decreasing returns to scale

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Definitions:

Local Community

A group of people living in the same place or having a particular characteristic in common, often within a smaller area that facilitates face-to-face interaction.

Blended Family

Two adults and their children. Because of divorce, separation, death, or adoption, the children are the offspring of other biological parents or of just one of the adults raising them.

Natural Family

An alternative term often used to refer to a nuclear family, emphasizing biological relationships within the family unit.

Extended Family

Relatives such as aunts, uncles, cousins, or grandparents and/or unrelated persons who are part of a family unit.