Still not understanding these answers/concept Determine whether the following pr

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Still not understanding these answers/concept

Determine whether the following production function: F(K,L)-K2/3L2,3 has Question constant, decreasing, or increasing returns to scale. Answer Constant Returns to Scale Increasing Returns to Scale Decreasing Returns to Scale Points:' Multiple Choice: Determine whether the following produ... Determine whether the following production function: F(K, L) constant, decreasing, or increasing returns to scale. Question 3 K + 2 L + 1 has Answer Constant Returns to Scale Increasing Returns to Scale Decreasing Returns to Scale

Explanation / Answer

1. The correct answer is B. If we scale up L and K by a scalar say Z then this will scale up output by Z^(2/3). This is increasing returns to scale.

2. In this case the correct answer is C. If we double the values of K and L then output will less than double. Thus there is decreasing returns to scale. The correct answer is C.

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