If output is produced with two factors of production and with increasing returns to scale, a)...

Question:

If output is produced with two factors of production and with increasing returns to scale,

a) there cannot be a diminishing marginal rate of substitution.

b) all inputs must have increasing marginal products.

c) on a graph of production isoquants, moving along a ray from the origin, output more than doubles as the distance from the origin doubles.

d) the marginal product of at least one input must be decreasing.

e) all inputs must have decreasing marginal products.

Returns to Scale:

Returns to scale refer to a term used to describe the increase in output level when all the available inputs are changed at the same rate. Understating the return to scale is essential for an organization because it allows it to know the amount of input it needs to put into its production activities.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

If output is produced with two factors of production and with increasing returns to scale, (c) on a graph of production isoquants, moving along a ray...

See full answer below.


Learn more about this topic:

Loading...
Returns to Scale in Economics: Definition & Examples

from

Chapter 3 / Lesson 71
198K

Understand the meaning of returns to scale in economics. Learn about increasing returns to scale, constant returns to scale and decreasing returns to scale.


Related to this Question

Explore our homework questions and answers library