Answer to Question #106834 in Microeconomics for Abongile

Question

Which of the following best explains why we cannot consider the return to scale of a production function in the short run?
1) production functions exhibit negative returns to scale in the short run
2) returns to scale determine the diminishing marginal returns of the inputs
3) returns to scale is a property of the consumer’s utility function in the short run
4) we cannot change all of the production inputs in the short run
5) the marginal rate of technical substitution is constant in the short run

Answer 1

We cannot consider the return to scale of a production function in the short run, because we cannot change all of the production inputs in the short run. So, the correct answer is 4.