Suppose Ford Could Triple Production of Mustangs by Tripling Its

question 64

Multiple Choice

Suppose Ford could triple production of Mustangs by tripling its production facilities for those cars. This is an example of

• A) constant returns to scale.
• B) increasing returns to scale.
• C) decreasing returns to scale.
• D) the law of diminishing returns.
• E) diminishing marginal rate of substitution.

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Definitions:

Deposit

A sum of money placed into a bank account or given as security for a contractual obligation.

Ordinary Annuities

Fixed payments received or paid out over a designated series of periods where the payments occur at the end of each period.

Annuities Due

An annuity for which payments are made at the beginning of each period, rather than at the end.

Deferred Annuities

An insurance product that delays payments of income, installments, or a lump sum until the investor elects to receive them, which is usually during retirement.