Assume That There Are Decreasing Returns to Capital, Decreasing Returns

question 26

Multiple Choice

Assume that there are decreasing returns to capital, decreasing returns to labour, and constant returns to scale. An increase in the capital stock will cause which of the following?

• A) Decrease the capital- labour ratio.
• B) An increase in output per capita.
• C) No change in output.
• D) Output to increase, but by more and more as the capital stock increases.
• E) A decrease in output.

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Definitions:

Feminists

Advocates or supporters of the rights and equality of women in political, economic, and social spheres.

Structural-functionalism

A theory within sociology that perceives society as a complicated system in which its components function in unison to foster unity and steadiness.

Order

An arrangement or sequence of things or events, or the command, direction, or instruction given by an authority.

Stability

The condition of being resistant to change and capable of maintaining a balanced or constant state despite external pressures.