Suppose That Capital and Labor Must Be Kept in a Fixed

question 25

Multiple Choice

Suppose that capital and labor must be kept in a fixed proportion to produce a particular good.For example,digging a trench requires one worker who has one shovel.What does this imply about returns to scale?

• A)There are constant returns to scale.
• B)There are increasing returns to scale.
• C)There are decreasing returns to scale.
• D)Nothing.

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Definitions:

Self-Control

Controlling one's emotional responses, cognitive processes, and actions in situations presenting temptations and spontaneous impulses.

Rationalization

In psychoanalytic theory, the defense mechanism that produces a seemingly logical rationale for an impulse or thought that otherwise would cause anxiety.

Defense Mechanism

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Psychosexual Stages

A Freudian theory describing how personality develops through five stages from infancy to adulthood, centered on sexual pleasure from specific body areas.