A firm has a production function of Q(K,L) = K04L0.6 a) Explain the concept of returns to scale. Does the function provide increasing, decreasing, or constant returns to scale? b) Provide an example of a typical sector with increasing returns to scale. c) Explain the concept of MRTS and argue whether the MRTS for this production function is diminishing. Please also provide a graphical illustration using numbers.

Consider the following production function when K is fixed. (This is a description of the figure: it shows a two-axis graph; in the horizontal axis we measure labor and in the vertical axis we measure meals; the graph of the production function is a line that intersects the vertical axis at a positive amount; this graph is a line with positive slope and passes through the point (4,300)). Can we say that the production function satisfies the law of decreasing marginal returns of labor?True False

Consider the followng production function: 1 2 9 = x?x where x, and x, measure the employed quantities of input #1 and input #2, respectively. (a) Solve for and graph this firm's isoquant at q isoquant. 10. Please label three points along this (b) Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain. Please corroborate your answer using a set of isoquants when the quantity of both imputs gets doubled. Note: Be sure to plot x2 along the y-axis.

Suppose the production function for T-shirts can be represented as q =  L0.25 K0.75. Show that the production function has constant returns to scale.

Lesson 7- Production Question 8

Suppose that a firm's production function is given by the following relationship: Q = 2.5√/LK (i.e., Q = 2.5L0.5 K0.5) where is output, L is labor input, and K is capital input. What is the percentage increase in output if labor input is increased by 10%? (Assume that capital input is held constant.) What is the percentage increase in output if capital input is increased by 25%? (Assume that labor input is held constant.) What is the the percentage increase in output if both labor and capital are increased by 10%? 11