Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and the marginal product of capital are both decreasing.

(Round

your responses to two decimal

places.)

The

MPK

at 5 units of capital is

149.50

.

The

MPK

at 6 units of capital is

138.99

.

The

MPL

at 50 units of labor is

8.79

.

The

MPL

at 51 units of labor is

8.68

.

Does this production function exhibit increasing, decreasing, or constant returns to scale?

A.

Increasing returns to scale because the inputs exhibit diminishing marginal returns.

B.

Decreasing returns to scale because the inputs exhibit diminishing marginal returns.

C.

Constant returns to scale because a proportionate increase in all inputs results in the same proportionate increase in output.