Author Question: If a firm triples inputs and produces three times the output, then there are A) constant returns ... (Read 125 times)

ericka1 · **on:** Jul 1, 2018

If a firm triples inputs and produces three times the output, then there are

A) constant returns to scale.
B) diminishing marginal product.
C) decreasing returns to scale.
D) increasing returns to scale.

Question 2

If the government subsidizes an activity it believes is generates a positive externality and it really only produces an inframarginal positive externality then the subsidization will result in an overproduction of the activity in question.

a. True b. False