For the Cobb-Douglas production function Q = A L^0.6 K^0.5, returns to scale are:

Correct answer: B) Increasing, since the sum of the exponents is 1.1

Explanation

For Q = A L^a K^b, returns to scale depend on a + b. Here 0.6 + 0.5 = 1.1 > 1, so increasing returns to scale. If all inputs are multiplied by t, output rises by t^1.1. Each exponent being below one only means diminishing marginal returns to each factor individually.