Suppose There Are Constant Returns to Scale

question 106

Multiple Choice

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,its physical capital,and its human capital,but its technology is unchanged.Which of the following would double?

• A)both output and productivity
• B)output,but not productivity
• C)productivity,but not output
• D)neither productivity nor output

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Definitions:

Cost Improvement Opportunities

Areas identified within a business process or operation where reductions in cost can be made without compromising the quality or performance of the product or service.

Activity-Based Costing

A costing methodology that allocates overhead costs to specific products or services based on their consumption of resources or activities.

Factory Overhead Cost

Costs associated with manufacturing operations that cannot be directly traced to specific products, including expenses like utilities and maintenance for production facilities.

Activity Allocations

This refers to the process of assigning costs to specific cost objects based on their use of activities, often used in management accounting for better cost control.