A Firm That Is Able to Use Its Inputs More

question 256

Multiple Choice

A firm that is able to use its inputs more efficiently as it increases production in the long run BEST demonstrates:

• A)economies of scale.
• B)diseconomies of scale.
• C)labor-intensive production.
• D)capital-intensive production.

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Definitions:

Specialization

A process wherein individuals or businesses focus on producing a limited range of goods or services to gain greater efficiency and productivity.

Trade

The swapping of goods, services, or both among two or more entities.

Opportunity Cost

The loss incurred from potential opportunities when one choice is made over others.

Absolute Advantage

A condition where a country, entity, or individual can produce a good or service more efficiently than competitors using the same amount of resources.