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1. Show whether the following production functions exhibit decreasing returns to scale (DRS), constant returns to scale (CRS), or increasing returns
1. Show whether the following production functions exhibit decreasing returns to scale (DRS), constant returns to scale (CRS), or increasing returns to scale (IRS)? [5 pts. each]
a. q = 10L0.6K0.5
b. q = L + K
c. q = L0.6 + K0.5
2. Evaluate the following statements as true or false and provide your reasoning. [5 pts. each]
a. When MPL is less than APL, APL will fall.
b. When MPL equals zero, APL will also equal zero.
3. What is the difference between decreasing returns to scale and diminishing marginal product? [5 pts.]
