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Suppose that the number of points on an economics mid-term (P) can be characterized by the following productions function: P + 5H - 4B, Where
Suppose that the number of points on an economics mid-term (P) can be characterized by the following productions function:
P + 5H - 4B,
Where H is the number of hours spent studying for the exam and B is the number of beers consumed the week before the exam.Does the law of diminishing returns apply to H?To B?What does the typical isoquant look like for such production function?Is the production function characterized by increasing, decreasing or constant returns to scale?Explain your answers.
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