A Firm Uses Only Two Inputs to Produce Its Output

question 17

Multiple Choice

A firm uses only two inputs to produce its output.These inputs are perfect substitutes.This firm

• A)must have increasing returns to scale.
• B)must have constant returns to scale.
• C)could have increasing returns to scale, constant returns to scale, or decreasing returns to scale.
• D)must have decreasing returns to scale.
• E)must have decreasing returns to scale in the short run and constant returns to scale in the long run.

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Definitions:

FMVSS 121

Federal Motor Vehicle Safety Standard 121, which specifies the requirements for air brake systems in heavy vehicles, ensuring safety and reliability.

Maximum Stopping Distance

The furthest distance a vehicle can travel from the point where brakes are fully applied to when it comes to a complete stop.

Mph

Miles per hour, a unit of speed indicating the number of miles covered in one hour.

Dual Circuit Foot Valve

A type of valve used in air brake systems, allowing for control of two separate circuits with one pedal.