Returns to Scale Refers To

question 56

Multiple Choice

Returns to scale refers to:

• A)the increase in output that accompanies an increase in one input, all other inputs held constant.
• B)a change in a production process that enables a firm to achieve more output from a given combination of inputs.
• C)the number of units of increase in output that can be obtained from an increase in one unit of input.
• D)the percentage by which output will increase when all inputs are increased by a given percentage.

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Definitions:

Budget Constraint

A budget constraint represents the combinations of goods and services that a consumer can purchase given their income and the prices of those goods and services.

DVDs

Optical disc storage format used to store high capacity data like movies, software, and other digital content.

CDs

Short for Certificates of Deposit, which are savings certificates with a fixed maturity date and specified fixed interest rate that are issued by banks.

Budget Constraint

A budget constraint represents the limitations on the spending choices of consumers based on their income and the prices of goods and services.