In the Primary Metals industry, it is estimated that the elasticity of output with respect to labor is 0.51 and the elasticity of output with respect to capital is 0.73
These two measures indicate that the primary metals industry is characterized by A) decreasing returns to scale.
B) constant returns to scale.
C) increasing returns to scale.
D) no returns to scale.
C
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Dividing fiscal policy into two instruments has the effect of introducing another policy target:
A) the interest rate. B) the national debt. C) the unemployment rate. D) the division of output between public and private spending.
Suppose a lawyer leaves his $50,000-a-year job and starts his own firm breeding pit bulls. In the first year, his accounting profit is $70,000 . The lawyer finances his new business with $100,000 from his savings account, which had earned 10 percent interest. His economic profit is
a. $10,000 b. $60,000 c. $70,000 d. -$80,000 e. -$90,000
The worst remedy for curing the U.S. trade deficit is to
a. increase U.S. personal saving. b. reduce the budget deficit. c. encourage all nations to lower trade barriers. d. limit imports by imposing tariffs, quotas, and other trade restrictions.
The United States generally has a comparative advantage in the development of technology because it has:
A. a disproportionate share of the world's best research universities. B. patent laws, which no other country has. C. large amounts of natural resources. D. the greatest need for new technology.