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:

Consideration

A fundamental concept in contract law that refers to something of value exchanged between parties, which is required for a contract to be legally enforceable.

Negligently

Acting with a lack of reasonable care or concern for the consequences, leading to potential harm or damage.

Legal Detriment

A concept in contract law where a party receives something of value in exchange for foregoing a legal right, forming a basis for a binding agreement.

Legal Benefit

An advantage or gain, especially in a contractual context, that a party receives, which constitutes consideration necessary for a valid contract.