If a Firm Doubles Its Output in the Long Run

question 370

Multiple Choice

If a firm doubles its output in the long run and its unit costs of production decline, we can conclude that

• A)technological progress has occurred.
• B)economies of scale are being realized.
• C)the firm is encountering diminishing returns.
• D)diseconomies of scale are being encountered.

---

Definitions:

Halo Effect

A cognitive bias where a positive impression in one area influences a person's perception in other areas.

Bottom-up Processing

A way of processing information where perception starts with an analysis of the basic elements and builds up to a complete perception.

Self-relevant

Pertaining to information or stimuli that have personal significance to an individual, often influencing attention, perception, and memory processes.

Downward Counterfactual

An imagined alternative in which the outcome is worse than what actually happened.