With the Production Function , If We Double ________

question 108

Multiple Choice

With the production function , if we double ________, we have a constant returns production.

• A) capital
• B) capital, labor, and the stock of ideas
• C) capital and the stock of ideas
• D) capital and labor
• E) labor and the stock of ideas

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Definitions:

Marginal Product

The additional output derived from the addition of one more unit of a variable input, holding all other inputs constant.

Marginal Cost

refers to the increase in cost when producing one additional unit of output.

Average Variable Costs

Refers to the total variable costs (costs that change with production levels) divided by the quantity of output produced.

Average Fixed Costs

The total fixed costs of production divided by the total quantity of output produced, illustrating how fixed costs spread over units as output increases.