The Fact That a Large-Scale Operation Can Take Advantage of Specialization

question 66

Multiple Choice

The fact that a large-scale operation can take advantage of specialization of labor often gives rise to _____.

• A)constant marginal rate of substitution
• B)diseconomies of scale
• C)increasing returns to scale
• D)management inefficiencies

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Definitions:

Median Earnings

The middle value of earnings in a given distribution, with an equal number of persons earning more and less than this value.

Efficiency-wage Model

A theory suggesting that higher wages can lead to increased productivity by attracting better workers and motivating them to work harder.

Marginal Productivity

The additional output generated by employing one more unit of a particular input, holding other inputs constant.

Diminishing-returns Theory

The principle that says that if one factor of production is increased while others are held constant, the incremental output will eventually decrease.