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RHCP12 RHCP12
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3 months ago
Suppose an economy has the production function Y = A × K1/4 × H3/4, where Y denotes total output, A denotes the level of technology, K denotes the physical capital stock, and H denotes the efficiency units of production. Which of the following is TRUE of this economy?

▸ Production in this economy exhibits increasing returns to scale.

▸ Production in this economy exhibits decreasing returns to scale.

▸ Production in this economy exhibits constant returns to scale.

▸ Production in this economy decreases when the price level increases.
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Macroeconomics

Macroeconomics


Edition: 3rd
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schoolkidchuckschoolkidchuck
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Production in this economy exhibits constant returns to scale.
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