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

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Definitions:

Herzberg's Two-Factor Theory

A theory of motivation proposing that job satisfaction and dissatisfaction arise from two different sets of factors: hygiene factors and motivators.

Adam Smith

Known as the father of modern economics, he was an 18th-century philosopher best known for his theories on free market economics and the invisible hand concept.

Self-Interest

What is in the best interest of and benefit to an individual.

Social Exchange

A concept describing how social stability and change occur through the process of transactions agreed upon by individuals or groups.