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A Firm Has the Production Function F(x, Y) = X1

Question 2

Multiple Choice

A firm has the production function f(x, y) = x1.10y1. This firm has


A) constant returns to scale.
B) decreasing returns to scale and diminishing marginal product for factor x.
C) increasing returns to scale and decreasing marginal product for factor x.
D) decreasing returns to scale and increasing marginal product for factor x.
E) None of the above.

Correct Answer:

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