Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could potentially make would be:
A. (300 iPods, 500 tablets).
B. (100 iPods, 2,000 tablets).
C. (400 iPods, 2,000 tablets).
D. (200 iPods, 1,500 tablets).
Answer: A
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a. decreasing returns to scale.
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c. increasing returns to scale.
d. zero returns to scale.
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