How does increasing one input differ from scaling all inputs together?
Marginal product changes one input; returns to scale scales all inputs.
Follow the cause and effect
Write q=f(K,L) and identify fixed inputs.
Find MPL or MPK while holding the other input fixed.
Substitute (tK,tL) and compare with tq to classify scale.
The model you are using
Conditions for this model
Positive inputs and fixed technology; the exponents are hypothetical.
The exam trap
Diminishing MPL can coexist with increasing returns to scale because the experiments differ.
Connect the reasoning to the graph
What changes
- A total-product curve shows marginal product as slope, while an isoquant map compares input mixes.
What stays fixed
Positive inputs and fixed technology; the exponents are hypothetical.
Keep these conditions throughout the comparison; change only what the case above specifies.
What to inspect
Substitute (tK,tL) and compare with tq to classify scale.
Compare before and after, and locate the conclusion on the graph.
5 MINUTES · TRANSFER THE IDEA
Can you explain it without the lesson?
Classify q=K^0.4L^0.4 by MPL behavior and returns to scale, stating what is held fixed.