Question

Give any two differences between returns to a factor and returns to scale.

Answer 1

	Returns to a factor	Returns to a scale
1.	Returns to a factor are changes in the physical amount of a good that occur when the quantity of one factor is increased while the quantities of the other elements remain constant.	When all inputs are modified in the same proportion at the same time, we call this a change in the scale of production. This is known as the law of returns to scale.
2.	It is concerned with short-run times.	It is concerned with long run times.

Answer 2

Basis	Returns to a Factor	Returns to Scale
Law:	It means or indicates a change in the level of output due to a change in any one factor, keeping other factors constant.	It means or indicates a change in the level of output due to change in all the factors of production at a particular rate.
Variability of factors:	Here, factor proportion i.e. K/L, changes.	In this case, factor proportion, i.e., K/L, remains constant.
Types of returns:	Three possible returns to a factor are increasing return, constant return and diminishing return to a factor.	There are three types of returns to scale like, increasing returns to scale, constant returns to scale and decreasing returns to scale.
Applicability:	It’s applicable in the short run.	It’s applicable in the long run.