Assume a Firm Is Using 10 Units of Capital and 10

question 96

Multiple Choice

Assume a firm is using 10 units of capital and 10 units of labour to produce 10 widgets per hour. By doubling both inputs the result is a doubling of output. This firm is experiencing

• A) decreasing returns.
• B) increasing costs.
• C) economies of scale.
• D) constant returns to scale.
• E) diseconomies of scale.

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Definitions:

Supplies Expense

Costs associated with the consumable items used during a company's operations over an accounting period.

Journalized

The process of recording transactions in a company's journal as part of the accounting system.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjusting entries have been made, verifying the equality of debits and credits.

Error Detection

The process of identifying inaccuracies, inconsistencies, or mistakes in financial information or accounting records.