Increasing returns to scale:
a) means that output rises proportionately more than inputs, resulting in increasing per unit costs.
b) means that output rises proportionately more than inputs, resulting in lower per unit costs in the long run.
c) has the same meaning as increasing costs of production.
d) means that output rises proportionately less than inputs, increasing per unit cost of production in the short run.
e) implies that the long-run average cost curve is shifting downward.
Ans: b) means that output rises proportionately more than inputs, resulting in lower per unit costs in the long run.
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If equilibrium price falls and the equilibrium quantity of the good purchased decreases, what has happened to either the supply curve or to the demand curve?
A) Supply increased. B) Demand decreased. C) Demand increased. D) Supply decreased.
The relative concept of poverty is based on how far behind average income a particular family gets.
Answer the following statement true (T) or false (F)
Consumer surplus is
A. equal to the amount consumers pay for a good. B. the value consumers get from a good but do not pay for. C. the value consumers do not pay because of a discount by supplier. D. the value consumers get from a supplier.
Generally when calculating profits as total revenue minus total costs, accounting profits are larger than economic profits because economists take into account:
A. only explicit costs. B. both explicit and implicit costs. C. only implicit costs. D. Both types of profits are always equal because they account for the same costs.