If a Firm Doubles Its Usage of All Inputs and Output

question 42

Multiple Choice

If a firm doubles its usage of all inputs and output less than doubles,the production function is said to exhibit:

• A)increasing returns to scale.
• B)decreasing returns to scale.
• C)constant returns to scale.
• D)decreasing marginal returns to a fixed factor of production.

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Definitions:

Activity-based Costing

An accounting method that assigns costs to products or services based on the activities and resources used to produce them.

Specialized Electric Motors

Electric motors that are designed and manufactured for specific applications or to meet particular requirements, distinguishing them from standard or generic motors.

Cost Drivers

Factors that cause changes in the cost of an activity or operation, influencing the total expenses.

Manufacturing Overheads

Expenses related to the manufacturing process that are not directly tied to the production of individual units, such as factory rent and machinery maintenance.