Which of the Following Statements Is Correct If a Firm

question 22

Multiple Choice

Which of the following statements is correct if a firm builds a large plant and,at economic capacity output,its short-run average cost increases?

• A)Decreasing returns to scale must be present.
• B)Increasing returns to scale must be present.
• C)Constant returns to scale must be present.
• D)Decreasing,increasing and constant returns to scale are all possible.

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Definitions:

Nativists

Philosophers or scientists who argue that certain skills or abilities are "native" or hard-wired into the brain at birth, contrasting with those who believe in the primacy of the environment (empiricists).

Cognitive Abilities

Refer to the mental skills that enable learning, problem-solving, memory, and attention.

Prewired Abilities

Innate capacities or functions that are present and operational at birth.

Dishabituation

The revival of attention to a stimulus following the presentation of a new or different stimulus, after habituation has occurred.