Question

Suppose a firm has a production function given by Q=2K+L, where L is labor, K is capital and Q is the quantity of output. Which of the following statements is WRONG?

A. The firm is exhibiting constant returns to scale

B. The firm’s marginal product of capital is constant

C. The firm’s marginal product of labor is constant

D. The firm’s marginal rate of technical substitution depends on the amount of inputs

Answer 1

Q = 2K + L is exhibiting option CA is not the answer as the trum scale constant returns to If we increase input by 'Ř units then output also increases by 'R' units 2 RK + RL R ( 2K + L) - R Q is not the answer option product of capital (MPK) as marginal is constant MP4 2 ӘК as option © is not the answer as marginal product of labour is constant MP2= 1 OL option is the answer Marginal Rate of Technical Substitution (MRTS) does not depend on amount of inputs MRTS MPL. constant MPK HOPE THIS HELPS KINDLY UPVOTE / - 2