Using 100 Workers and 10 Machines, a Firm Can Produce

question 20

Multiple Choice

Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by:

• A) economies of scope.
• B) diseconomies of scale.
• C) economies of scale.
• D) diminishing marginal productivity.

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Definitions:

Randomly Assigns

In experimental design, the process by which study participants are allocated to different groups in a manner that ensures each participant has an equal chance of being placed in any group.

Comparison Groups

Groups in an experimental design that are not exposed to the treatment under investigation but are compared to the experimental group to assess the treatment's effect.

Independent Variable

The experimental variable used to divide participants into groups.

Interaction

The process by which entities or individuals act upon or communicate with each other.