In the Production of Bicycles an Increase of 2 Percent

question 28

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:

Breach of Contract

Occurs when one or more parties involved in a contract fail to fulfill their legal obligations as stipulated in the agreement, potentially leading to legal action for damages or specific performance.

Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Goods

Tangible, movable objects intended for sale or personal use, excluding real estate and intangible items.

Risk of Loss

The potential that an asset or investment will decrease in value or become worthless, also refers to the responsibility for damage or loss of goods in commerce.