Joe’s coffee house operates under the production function Q(L,K)= LK + (LK)1/2. In the short-run, capital (K) is fixed while labor (L) is variable. Which statement correctly describes Joe’s short-run total product of labor curve?
Production functions MRTS labor and capital Multiple Choice Questions (5 points each) 1. Consider the production function 𝑄(𝐿,𝐾)=(𝐿1/2 + 𝐾1/2)2/3, where L denotes labor and K denotes capital. This production function exhibits a. constant returns to scale. b. decreasing returns to scale. c. increasing returns to scale. (See Besanko 6.19, 6.20, 6.24 and 6.25 and […]