The Incremental Unit-Time Learning Model with a 90% Learning Curve

question 169

True/False

The incremental unit-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture.

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Definitions:

Workers

Individuals engaged in any form of economic activity to earn a living, including both paid and unpaid efforts.

Diseconomies of Scale

The phenomenon where, as a firm or industry grows beyond a certain point, per unit costs start increasing due to inefficiencies.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Diminishing Marginal Returns

The principle that as additional units of a factor of production are added, the increase in output will eventually decrease, holding other factors constant.