Multiple Choice
Suppose the production function for good q is given by q = 3K + 2 L where K and L are capital and labor inputs.Consider three statements about this function:
I.The function exhibits constant returns to scale.
II.The function exhibits diminishing marginal productivities to all inputs.
III.The function has a constant rate of technical substitution.
Which of these statements is true?
A) All of them.
B) Only I.
C) I and II but not III.
D) I and III but not II.
Correct Answer:
Verified
Correct Answer:
Verified
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