If All Resources Used in the Production of a Product

question 296

Multiple Choice

If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be

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

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Definitions:

Marginal Utility

The supplementary joy or advantage an individual experiences when acquiring an extra unit of a good or service.

Total Utility

The total satisfaction or benefit that a consumer derives from consuming a certain quantity of a good or service.

Total Utility

The total satisfaction received from consuming a particular quantity of goods and services.

Marginal Utility

The change in satisfaction or utility that an individual gains from consuming an additional unit of a good or service.