For a constant-returns-to-scale production function,
a. marginal costs are constant but the average cost curve has a U-shape.
b. both average and marginal costs are constant.
c. marginal cost has a U-shape; average costs are constant.
d. both average and marginal cost curves are U-shaped.
b
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A fall in the price of flour, used in making cakes, is likely to:
A) increase the supply of cakes. B) decrease the quantity supplied of cakes. C) increase the quantity supplied of cakes. D) decrease the supply of cakes.
In a small Asian country, it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $5 million to $6 million
If the number of hours worked in the labor force does not change, what does this information tell you about the slope of the per-worker production function in this range? A) The slope is -4. B) The slope is 1/4. C) The slope is 4. D) The slope is 8.