An Aggregate Production Function Exhibits Increasing Returns to Capital When

Multiple Choice

An aggregate production function exhibits increasing returns to capital when

A) no change in capital produces a 1% increase in output.
B) a 1% decrease in capital produces an increase in the marginal product of capital.
C) a 1% increase in capital produces no change in output.
D) each additional unit of capital increases the number of jobs by more than 1%.
E) each additional unit of capital has a higher marginal product than the previous unit.