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1) Consider the following production functions, where q is the quantity produced of the good, K is the quantity of capital used, and L is

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1) Consider the following production functions, where q is the quantity produced of the good, K is the quantity of capital used, and L is the quantity of labour used: Production Function 1: 4(K, L) = K " L" Production Function 2: q(K. L) = K" + 1" a) Suppose that a = 1 and / = 1. Does Production Function 1 have decreasing, constant or increasing returns to scale? Explain. b) Suppose that a = 1 and / = 1. Does Production Function 2 have decreasing, constant or increasing returns to scale? Explain. 2 c) Suppose that

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