Post Utme Aaua 2022 Economics Question 1

Practice objective / multiple choice question 1 from the 2022 Post Utme Aaua Economics examination.

Post Utme Aaua 2022 Economics Objective / Multiple Choice
Question 1 POST_UTME_AAUA • 2022 • ECONOMICS • objective

U\sing the concept of returns to scale, explain why a firm's production function is likely to exhibit increa\sing returns to scale in the short run but decrea\sing returns to scale in the long run.

Answer Options

Correct Answer A. The firm's production function exhibits increa\sing returns to scale in the short run because of the law of diminishing marginal returns.
B. The firm's production function exhibits decrea\sing returns to scale in the long run because of the law of increa\sing marginal \costs.
C. The firm's production function exhibits increa\sing returns to scale in the long run because of the law of cons\tant returns to scale.
D. The firm's production function exhibits decrea\sing returns to scale in the short run because of the law of increa\sing marginal returns.
Correct Answer
A
Correct Option:
The firm's production function exhibits increa\sing returns to scale in the short run because of the law of diminishing marginal returns.

About This Question

This is Post Utme Aaua 2022 Economics Question 1. It is one of the objective questions from the 2022 Post Utme Aaua Economics examination.

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