If All Resources Used in the Production of a Product

question 186

Multiple Choice

If all resources used in the production of a product are increased by 10 percent and output increases by less than 5 percent, then the firm is experiencing

• A)economies of scale.
• B)diseconomies of scale.
• C)constant returns to scale.
• D)decreasing average total costs.

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Definitions:

Structural Unemployment

Unemployment caused by a mismatch between workers' skills and the requirements of available jobs, often due to technological or economic changes.

Frictional Unemployment

The short-term unemployment that arises from the process of matching workers with jobs, often due to workers changing jobs or entering the workforce.

Potential Output

The highest level of real GDP (gross domestic product) that can be sustained over the long term without increasing inflation.

Expected Price Level

The anticipated average level of prices for all goods and services in an economy for a future period, influenced by current and forecasted economic conditions.