When a Firm Faces Constant Returns to Scale, a Proportionate

question 28

Multiple Choice

When a firm faces constant returns to scale, a proportionate increase in all inputs:

• A) will keep output constant.
• B) will increase output by the same proportion as the increase in inputs.
• C) will lead to a decline in the cost of production.
• D) will result in a higher-than-proportionate increase in output.
• E) will not change the total costs of production.

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Definitions:

Conditioned Responses

Reactions that are learned through conditioning, where an individual associates a specific stimulus with a particular response.

Skinner Box

An experimental apparatus designed by B.F. Skinner for studying animal behavior through operant conditioning.

Reinforcer

Any stimulus that strengthens or increases the likelihood of a specific response or behavior by being presented immediately after that response or behavior.

Respondent Behavior

behavior that occurs as a direct response to a specific stimulus, often without conscious decision, in classical conditioning.