Author Question: Individuals become dependent on welfare payments because the benefits that have to be given up in ... (Read 22 times)

LaDunn · **on:** Jul 1, 2018

Individuals become dependent on welfare payments because the benefits that have to be given up in order to become employed are higher than the benefits from working.

a. True b. False

Question 2

Carefully explain the difference between diseconomies of scale and diminishing returns.

What will be an ideal response?

TDubDCFL · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

a

Answer to Question 2

Diseconomies of scale means that, in the long run, average costs are rising, usually due to coordination problems or decreasing returns to scale. Diminishing returns means that, in the short run, marginal product is falling (or marginal cost is rising) because each additional worker is producing less than the one before him, due to the fact that capital (or some other factor of production) is fixed. There is no connection between these things.