Question

Distinguish between Returns to a factor and Returns to scale.

Answer 1

Returns to a factor	Returns to scale
(i) Short run concept	(i) Long run concept
(ii) Only one or some inputs can be changed keeping other inputs fixed.	(ii) All factors are variable
(iii) Factor ratio changes.	(iii) No change in factor ratio
(iv) There is no change in scale of production.	(iv) change in scale of production
(v) Refers to change in output when one input is variable.	(v) Refers to change in output when all inputs are variable.