When Industry Expansion Causes Input Prices to Rise, We Call

question 54

Multiple Choice

When industry expansion causes input prices to rise, we call this

• A)external diseconomies of scale.
• B)the law of increasing costs.
• C)internal diseconomies of scale.
• D)increasing returns.
• E)diminishing returns.

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Definitions:

Durable Goods

Products that are intended to last for a significant amount of time, such as appliances, cars, and furniture, as opposed to consumer goods which are consumed quickly.

Nondurable Goods

Products with a limited lifespan, intended for consumption or use over a short period, such as food or paper products.

Tangible Attributes

Physical features or characteristics of a product that can be directly perceived by the senses, such as size, shape, color, or weight.