With Increasing Returns to Scale, Isoquants for Unit Increases in Output

question 47

Multiple Choice

With increasing returns to scale, isoquants for unit increases in output become:

• A) farther and farther apart.
• B) closer and closer together.
• C) the same distance apart.
• D) none of these.

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Definitions:

Utility Function

A mathematical representation of a consumer's preferences, used in economics to model choices made under uncertainty, to maximize satisfaction or utility.

Expected Utility

A concept in economics that calculates the utility expected from an investment, considering all possible outcomes.

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how spread out the values in a data set are.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, marking preferences of equal utility.