Suppose that productivity-enhancing technological progress ...

[SO00]

Suppose that productivity-enhancing technological progress affected more the production of chairs than the production of tables. This can be depicted using a production possibilities frontier in which
 
  A) only the chair axis intercept increases.
  B) only the table axis intercept decreases.
  C) both intercepts increase; however, the chair intercept increases by more.
  D) both intercepts increase; however, the chair intercept increases by less.

Question 2

Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, the firm will experience
 
  A) increasing returns to scale.
  B) constant returns to scale.
  C) decreasing returns to scale.
  D) The returns to scale cannot be determined from the information provided.

[Brummell1998]

Answer to Question 1

C

Answer to Question 2

B

[SO00]

Thank you

[Brummell1998]

No problemo