For This Question,assume That There Are Decreasing Returns to Capital,decreasing

question 32

Multiple Choice

For this question,assume that there are decreasing returns to capital,decreasing returns to labor,and constant returns to scale.A reduction in the capital stock will cause which of the following?

• A)a reduction in output
• B)no change in output
• C)an increase in output per capita
• D)increase the capital-labor ratio
• E) none of the above

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Definitions:

Cost of Goods Sold

Represents the total expense incurred from creating or acquiring the goods that a business sells during a period, crucial for evaluating profitability.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, resulting in a net income or loss.

Cost of Goods Sold

Expenses directly connected to the crafting of merchandise a company markets, comprising materials and labor.

Finished Goods

The inventory that has completed all stages of production and is ready to be sold to customers.