If You Double All of the Inputs of a Production

question 49

True/False

If you double all of the inputs of a production process but one and still observe output increasing by more than 100%, then you can be sure that the process displays increasing returns to scale.

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Definitions:

Marginal Product

The additional output resulting from using one more unit of a particular input, holding other inputs constant.

Labor Hours

The total hours of work provided by employees or workers within a specific timeframe.

Marginal Rate

The rate of change of a variable as another variable changes, typically used in the context of taxes, substitution, or transformation rates.

Technical Substitution

The process of replacing one technique or technology with another that is more efficient or cost-effective.