Assume a Firm Is Using 10 Units of Labour and 10

question 29

Multiple Choice

Assume a firm is using 10 units of labour and 10 units of capital and is producing 10 units of output per hour.Now both inputs are doubled,resulting in output rising to 18 units per hour.The firm is experiencing

• A)constant returns to scale.
• B)increasing returns to scale.
• C)decreasing returns to scale.
• D)economies of scale.
• E)decreasing costs.

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Definitions:

Curse Of Knowledge

A cognitive bias that occurs when an individual, knowing something, finds it hard to think about the subject from the perspective of someone less knowledgeable.

Susceptibility

The likelihood or tendency to be influenced or harmed by a particular thing or condition.

Egocentrism

The inability to differentiate between self and other, often resulting in viewing the world solely from one's own perspective.

Conservation

The understanding that certain properties of an object or substance remain the same even when its appearance changes, a concept grasped during the concrete operational stage in Piaget's theory of cognitive development.