The Figure Below Shows a Family of Cost Curves for a Firm

question 58

Multiple Choice

The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes. FIGURE 8- 3
-Refer to Figure 8- 3. If this firm is producing at point B, then

• A) this firm is producing a level of output that is technically inefficient in the long run.
• B) this firm could produce the same level of output at a lower cost with plant size 2.
• C) it should employ more of its variable factors of production.
• D) this firm is experiencing decreasing returns to scale.
• E) plant size 1 is optimal.

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Definitions:

Growth-Need Strength

The degree to which individuals require growth, personal accomplishment, and development within their job to feel satisfied.

Job Characteristics Model

A theory that proposes that the design of jobs can impact employee motivation, satisfaction, and performance, focusing on five core job characteristics.

Growth-Need Individuals

People who are motivated by an inherent desire for personal development and self-improvement.

Job Characteristics Model

A framework identifying five core job dimensions (skill variety, task identity, task significance, autonomy, and feedback) that influence motivational potential and job satisfaction.