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studying the produc- ibilities of a country is the following: If the amount of both capital (K) and in a country doubles, will its output double as well? The intuition behind this a company can build 1,000 vehicles with one fully staffed factory, it should be able to produce 2,000 vehicles with two fully staffed factories. To that end, we will pts. each) One question that economists are interested in when labor (L) is simple. If say that a production function exhibits -Constant Returns to Scale (CRS) if F(2K, 2L) 2F(K, L). That is, if a country is producing output F(K, L), doubling the amount of capital and labor will in fact double the output. -Decreasing Returns to Scale (DRS) if F(2K, 2L) < 2F(K, L). That is, if a country is producing output F(K, L), doubling the amount of capital and labor will result in less than double the output. -Increasing Returns to Scale (IRS) if F(2K, 2L)>2F(K, L). That is, if a country is producing output F(K, L), doubling the amount of capital and labor will result in more than double the output. It is easy to see that with our normal Cobb-Douglas function, given by F(K, L) = K1.7 does in fact exhibit constant returns to scale. To see this, notice that For each production function function below, determine if it exhibits constant, increas- ing, or decreasing returns to scale: (a) F(K, L) = 2K"L7 (b) F(K, L)-(+11) (c) F(K, L)=KI +Li