If the Labor Required Per Unit of Output Falls as Output

question 26

Multiple Choice

If the labor required per unit of output falls as output increases (such as is specified in the Krugman model) , this can be thought of as a situation

• A) of constant returns to scale.
• B) of decreasing returns to scale.
• C) of increasing returns to scale.
• D) that is exactly the same situation as was the case in Ricardo's analysis.

---

Definitions:

American Farms

Agricultural enterprises operating in the United States, focusing on the production of food, feed, fiber, and other products.

Small Farmer

An individual who manages and operates a small agricultural plot or farm, typically emphasizing sustainability and self-sufficiency.

Exports

Exports are goods or services produced in one country and sold to buyers in another country, contributing to a country's economic output.

Inflation Rate

The rate of growth in the general pricing for goods and services, which inversely affects purchasing capacity.