When alpha = 3/4 and beta = 1/4 for the Cobb-Douglas production function, returns to scale are A)...

Question:

When {eq}\alpha = \frac {3}{4} ~and~ \beta = \frac {1}{4} {/eq} for the Cobb-Douglas production function, returns to scale are

A) constant

B) increasing

C) decreasing

D) first increasing and then decreasing

Production Function:

Production function depicts the relationship between the total inputs used in production and the total output produced. Production fuction illustrates the productivity of the factors of production used in the production process.

Answer and Explanation: 1

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A. Constant

Reason: In a cobb douglas production function, the exponents (i.e alpha and beta) of the factors of production indicates the output...

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The Cobb Douglas Production Function: Definition, Formula & Example

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Chapter 1 / Lesson 7
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Learn the definition of a production function in economics, understand the definition of a Cobb-Douglas production function and its formula, and explore some examples of Cobb-Douglas production function.


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