Indivisibility of capital causes _________ returns to scale due to ________ in the __________ production model.

Question

BlackTom AI · Accepted Answer

The question asks about the effect of capital indivisibility on returns to scale within a specified production framework.
Option 1: 'increasing, excess capacity, long run' — This pairing suggests that indivisibility leads to increasing returns to scale in the long run due to excess capacity. In most production models, indivisibility (a fixed, indivisible input) creates increasing returns to scale only over a range where the fixed input is amortized by a larger output, but the long run is when all inputs are variable, so indivisibility does not persist as a driver of increasing returns in the long run. Moreover, excess capacity is typically a concern in the short run when fixed inputs limit utilization, not a sustained long-run condition. Overall, this option misplaces both the long run and the role of excess capacity.
Option 2: 'decreasing, excess capacity, long run' — Here, it claims decreasing returns to scale, which would occur if output grows at a slower rate than input expansion. Indivisibility generally does not induce decreasing returns in the long run, where inputs are fully adjustable; plus, excess capacity is a short-run phenomenon tied to fixed inputs, not a long-run constraint. This combination is inconsistent with standard production theory.
Option 3: 'increasing, excess capacity, short-run' — This option links indivisibility to increasing returns to scale arising in the short run when a fixed capital input cannot be scaled down immediately. With a fixed input and scalable variable inputs, doubling all inputs can more than double output until the fixed input becomes a bottleneck, indicating increasing returns to scale within the short-run window. Excess capacity reflects unused capacity that can be leveraged as output expands, which fits the short-run context.
Option 4: 'decreasing, limited capacity, long run' — This statement pairs decreasing returns with limited capacity in the long run. Limited capacity implies a constraint on the maximum output from fixed inputs, which is more characteristic of short-run limits rather than a long-run condition where capacity could be expanded. Moreover, decreasing returns in the long run contradict the idea that all inputs can be adjusted, undermining the typical interpretation of long-run behavior.

Indivisibility of capital causes _ returns to scale due to in the __ production model.

查看解析

登录即可查看完整答案

类似问题

Gale Furniture uses labor, capital, and wood as inputs in its production of office desks. When Gale Furniture doubles the quantity of labor, capital, and wood, the quantity of office desks doubles. Gale Furniture’s production process is characterized by

Question5 According to Andreoni and Levinson (2001), the sweeper analogy is an example of: None of the other options are correct Decreasing returns to scale No returns to scale Increasing returns to scale ResetMaximum marks: 1 Flag question undefined

Question at position 12 Which of the following is NOT a reason for decreasing returns to scale?technology changegrowth of bureaucracyworker disaffectionmanagement command and control problems

Suppose General Motors could triple its production of Cavaliers by tripling its production facility for those cars. This is an example of

If bread is produced by using a constant returns to scale production function, then if the:

A firm's production function is Y=F(K,L). If the firm doubles both K and L, output less than doubles. This implies

10. When a firm doubles its inputs and finds that its output has more than doubled, this is known as: A. Economies of scale B. Constant returns to scale C. Diseconomies of scale D. A violation of the law of diminishing returns

The production function Y=K1/3L2/3−G exhibits________ returns to scale in K and L. (Assume G is a positive real number.)

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单