Consider the Utility Function $\mathrm { U } = \min ( 5 \mathrm { x } , 7 \mathrm { y } )$

question 80

Multiple Choice

Consider the utility function $\mathrm { U } = \min ( 5 \mathrm { x } , 7 \mathrm { y } )$ .To increase satisfaction the consumer must consume

• A)at least 5 units more of
• B)at least 7 units more of y
• C)more of both x and y
• D)more of either x or y

---

Definitions:

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total costs.

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.