An Economy's Production Function Has the Constant-Returns-To-Scale Property

question 112

Multiple Choice

An economy's production function has the constant-returns-to-scale property.If the economy's labor force doubled and all other inputs stayed the same,then real GDP would

• A)stay the same.
• B)increase by exactly 50 percent.
• C)increase by exactly 100 percent.
• D)increase,but not necessarily by either 50 percent or 100 percent.

---

Definitions:

Activity Rate

A measure used in cost accounting to allocate costs to products or services based on the activities required to produce them.

Estimated Cost

An approximation of the cost to produce goods or services, used for budgeting and planning.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of the resources.

Materials Handling

The movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, and disposal processes.