If, as a result of doubling all its inputs, a firm can more than double its output, the firm's production function exhibits
a. constant returns to scale.
b. increasing returns to scale.
c. decreasing returns to scale.
d. increasing marginal productivity to at least one input.
b
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Why are externalities associated with common property rather than private property?
What will be an ideal response?
Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents: a. a smaller quantity of consumer goods than that represented by a point inside the PPF. b. an inefficient output combination of the two goods
in the economy. c. an unattainable output combination of the two goods in the economy. d. an output combination of more consumer goods than capital goods. e. a smaller quantity of capital goods than that represented by a point inside the PPF.