The Production of Cigarettes Is Highly Automated; However,a Worker Is

question 88

Multiple Choice

The production of cigarettes is highly automated; however,a worker is required to monitor each machine.Machines and workers do not interact with one another.Given this information,there are most likely

• A) economies of scale.
• B) economies of scope.
• C) constant returns to scale.
• D) increasing returns to scale.

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Definitions:

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced back to the product.

Product Cost

The total amount of costs directly assigned to the creation of a product, including materials, labor, and overhead.

Operating Expenses

All the costs associated with the day-to-day operations of a business, excluding the direct costs of producing goods and services.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business, including accounts payable, short-term loans, and taxes payable.