Returns to Scale Refers to the Change in Output When

question 108

Multiple Choice

Returns to scale refers to the change in output when

• A) all inputs increase proportionately.
• B) labor increases holding all other inputs fixed.
• C) capital equipment is doubled.
• D) specialization improves.

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Definitions:

Tax Incidence

The study of who ultimately bears the economic burden of a tax, whether producers or consumers.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in its price.

Excise Tax

A tax levied on the sale of particular goods and services, such as alcohol, tobacco, and gasoline.

Pretax Equilibrium

The market condition where supply and demand balance before any taxes are applied.