Answer:
A) no, the quantity increases at a constant rate.
B) yes, quantity increases at a lower rate after each additional units of labor is added.
Explanation:
We should derivate to know if the function increases or decreases:
at until which point this occur:
A)
q = 10 L + K
if K = 2
q = 10L +2
q' = 10
As q' is positive and constant the function increases at the same rate for all the positives values of L.
B)
[tex]q = 2^{0.5} \times L^{0.5}[/tex]
[tex]q' = (0.5\times 2^{0.5})L^{-0.5} [/tex]
[tex]q' = \frac{(0.5\times 2^{0.5})}{\sqrt{L}}[/tex]
As L increases, the additional output decreases. This economy faces diminishing marginal returns to labor.
