Increasing Returns to Scale

question 6

Multiple Choice

Increasing returns to scale

• A) means that output rises proportionately less than inputs, increasing per unit cost of production in the short run.
• B) means that output rises proportionately more than inputs, resulting in increasing per unit costs.
• C) implies that the long- run average cost curve is shifting downward.
• D) has the same meaning as increasing costs of production.
• E) means that output rises proportionately more than inputs, resulting in lower per unit costs in the long run.

Learn how skill-based pay systems function and their impact on training costs.

Recognize the role of gain-sharing and profit-sharing in enhancing employee motivation and performance.

Acknowledge the effectiveness of team-based financial incentives on various organizational outcomes.

Assess the use of employee stock ownership plans (ESOPs) and their effects on employee motivation.

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Definitions:

Present Value

Today's worth of a future money sum or cash flow chain, considering a predetermined rate of return.

Usurious Interest

Exorbitantly high interest rates, often exceeding legal or ethically acceptable limits.

Unconscionable

Refers to actions or terms that are excessively unjust or unreasonable, often to a degree that they violate fairness or ethics.

Supply

The sum of a product or service that can be bought at a specific price.