Increasing Returns to Scale Refers to

question 14

Multiple Choice

Increasing returns to scale refers to

• A) more total factor productivity leading to greater aggregate output.
• B) lower real interest rates leading to greater aggregate output.
• C) output doubles as all inputs double.
• D) output more than doubles as all inputs double.
• E) marginal product of labour diminishes when quantity of capital increases.

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Definitions:

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.

Standard Costs

Standard costs are the estimated costs associated with the production of goods or services, used for budgeting and performance evaluation.

Actual Costs

Actual costs are the expenses that have been incurred or the true amount of money spent on a project, product, or activity.

Fixed Overhead Budget Variance

The difference between the budgeted fixed overhead costs and the actual fixed overhead incurred.