As a Result of Doubling All Its Inputs, If a Firm

question 39

Multiple Choice

As a result of doubling all its inputs, if a firm can more than double its output, its production function exhibits

• A) Constant returns to scale.
• B) Increasing returns to scale.
• C) Decreasing returns to scale.
• D) Increasing marginal productivity to at least one input.

Understand how economic growth and inflation affect real GDP per capita.

Distinguish between GDP and Net Domestic Product (NDP) and their respective significance.

Analyze the impact of population changes on GDP and real GDP per capita.

Identify which components are included and excluded in the calculation of GDP.

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Definitions:

Licensing Suppliers

The process by which a business grants other businesses permission to manufacture its product or provide its service in exchange for a fee or royalty.

Price Floor

A government-imposed minimum price that can be charged for a commodity, above what would be set by market forces, to ensure that producers receive a minimum income.

Equilibrium Price

The price in the market where the amount of products offered matches the amount of products consumers want to buy.

Quota Rent

Quota Rent is the economic rent a producer earns from the difference between the domestic price and the world price due to a quota system limiting imports.