QUESTION 3

a.Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale. Provide relevant workings.

i.Q = 0.25X + 5Y + 30Z

ii.Q = 4L² + 6LK + 3K²

iii.Q = 2L^0.2K^0.6

(12 marks)

b. i) Describe the condition of finding the optimum level of single input and multiple inputs.

ii) Describe the concept of finding the optimum level of multiple inputs.

(8 marks)