The figure below illustrates a series of short-run cost curves numbered AC1 through AC4, which correspond to the only four different plant sizes possible. 
a) What can you say about returns to scale?
b) Are economies of scale present?
c) If it takes 6 workers and 30 units of capital to produce 10 units of output, how much labour and capital are necessary to produce 20 units of output?
Definitions:
Insurance Policies
Contracts between an insurer and an insured that provides financial protection or reimbursement against losses.
Total Gross Pay
The complete amount of income earned by an employee before any deductions or taxes are applied.
Commission
A fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the sale.
Net Proceeds
The amount of money received from a sale after subtracting costs and expenses.
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