Q2. Text – B & B, 5th ed. Problem #6.24

Consider a CES production function given by Q = (K0.5 + L0.5)2.

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

b) Suppose that the production function took the form Q = (100 + K0.5 + L0.5)2. Does this production

function exhibit increasing, decreasing, or constant returns to scale?