In the Production of Bicycles an Increase of 2 Percent

question 33

Multiple Choice

In the production of bicycles an increase of 2 percent in the level of capital and labor respectively will generate an increase of 1 percent in the production of bicycles.From this information we know that the production of bicycles exhibits:

• A)Diminishing marginal returns
• B)Decreasing returns to scale
• C)Increasing returns to scale
• D)Constant returns to scale