The Table Below Shows Various Values of Labour (L),capital (K),and

question 110

Multiple Choice

The table below shows various values of labour (L) ,capital (K) ,and technology (T) for Economies A,B,and C.In each case,the aggregate production function takes the following form: Y = T × TABLE 25-4 Refer to Table 25-4.The production function that applies to Economies A,B,and C displays

• A)increasing returns to scale.
• B)increasing marginal returns to capital.
• C)diminishing marginal returns to capital.
• D)constant returns to scale.
• E)Both C and D are correct.

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Definitions:

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs to convert raw materials into finished products.

Direct Materials

The raw materials that are directly traced and integrated into the final product and are a significant part of the manufacturing cost.

Weighted-Average Method

is an inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs incurred to convert raw materials into finished products.