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Examveda

Which one of the following production function best example the returns to scale effect?

A. $${\text{Y}} = {\text{aX}}_1^{{\alpha _1}},\,{\text{X}}_1^{{\alpha _2}},\,{\text{X}}_1^{{\alpha _3}},\,.\,.\,.\,.\,.\,.\,.\,{\text{X}}_{\text{n}}^{{\alpha _{\text{n}}}}$$

B. $${\text{Y}} = {{\text{a}}_0} + {{\text{a}}_1}{{\text{X}}_1} + {{\text{a}}_2}{{\text{X}}_2} + {{\text{a}}_3}{{\text{X}}_3}\,.\,.\,.\,.\,.\,.\,.\,{{\text{a}}_{\text{n}}}{{\text{X}}_{\text{n}}}$$

C. $${\text{Y}} = {{\text{a}}_0} + {{\text{a}}_1}{\text{X}} + {{\text{a}}_2}{{\text{X}}^2} + {{\text{a}}_3}{{\text{X}}^3}\,.\,.\,.\,.\,.\,.\,.\,{{\text{a}}_{\text{n}}}{{\text{X}}^{\text{n}}}$$

D. $$\frac{{\text{Y}}}{{{{\text{X}}_1}}} = {{\text{a}}_0} + {{\text{a}}_1}{{\text{X}}_1} + {\alpha _2}\left( {\frac{{{{\text{X}}_2}}}{{{{\text{X}}_1}}}} \right)\,.\,.\,.\,.\,.\,.\,.\,{\alpha _{\text{n}}}\left( {\frac{{{{\text{X}}_{\text{n}}}}}{{{{\text{X}}_1}}}} \right)$$

Answer: Option A


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