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.

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Definitions:

Machine Hours

The cumulative duration during which machines are utilized in the production process, often a factor in costing models.

Contribution Margin

The amount by which sales revenue exceeds variable costs, it's a key figure that helps in assessing the profitability of products or services.

Selling Price

The amount of money charged for a product or service, which can cover costs and provide profit for the seller.

Machine Hours

represent the total time that production equipment or machines are operated within a specific period, often used to allocate manufacturing overhead.