If a Firm Doubles the Amount of Labor It Uses

question 67

Multiple Choice

If a firm doubles the amount of labor it uses and triples the amount of capital it uses but its level of output less-than-triples as a result,what can be said about the firm's returns to scale?

• A) This firm has increasing returns to scale.
• B) This firm has decreasing returns to scale.
• C) This firm has constant returns to scale.
• D) Nothing can be determined about this firm's returns to scale based on the information given.

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Definitions:

tRNA

Transfer RNA; a type of RNA that helps decode a messenger RNA (mRNA) sequence into a protein during protein synthesis.

Mutation

Permanent change in the DNA sequence of a chromosome.

Amino Acid

Organic compounds that combine to form proteins and are characterized by having a carboxyl and an amino group.

DNA Mutation

A change in the DNA sequence within a gene or chromosome of an organism that can lead to variations in phenotype.