A production function with the character Decreasing Return to Scale (DRTS) means that if the production scale is doubled, the output will be a. Increased twofold c. It has more than doubled b. Increased less than twofold d. Neither is true 9. If the own-Pice elasticity of supply is 0.8, then ……. A decrease in P will decrease Q by as much as ……… a. 10%, 2% c. 8%, 10% b. 8%, 2% d. 10%, 8%
A production function with the character Decreasing Return to Scale (DRTS) means that if the production scale is doubled, the output will be a. Increased twofold c. It has more than doubled b. Increased less than twofold d. Neither is true 9. If the own-Pice elasticity of supply is 0.8, then ……. A decrease in P will decrease Q by as much as ……… a. 10%, 2% c. 8%, 10% b. 8%, 2% d. 10%, 8%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8. A production function with the character Decreasing Return to Scale (DRTS) means that if the production scale is doubled, the output will be
a. Increased twofold
c. It has more than doubled
b. Increased less than twofold
d. Neither is true
9. If the own-Pice elasticity of supply is 0.8, then ……. A decrease in P will decrease Q by as much as ………
a. 10%, 2%
c. 8%, 10%
b. 8%, 2%
d. 10%, 8%
Expert Solution
Step 1
8.
Decreasing return to scale (DRS) means when the production scale or production variables increases by a particular percentage then the output or production level is increased by less than proportional.
It means that if all inputs are increased by 2 fold than the output will be increased by less than 2 fold.
So, the correct option is b) ‘ Increased less than 2 fold.
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