Post Utme Madonna University 2020 Economics Question 6

Practice objective / multiple choice question 6 from the 2020 Post Utme Madonna University Economics examination.

Post Utme Madonna University 2020 Economics Objective / Multiple Choice
Question 6 POST_UTME_MADONNA_UNIVERSITY • 2020 • ECONOMICS • objective

The concept of returns to scale in production theory refers to the change in the output of a firm as its inputs are increased, while holding all other factors cons\tant. Which of the following statements best describes the relationship between returns to scale and the law of diminishing marginal productivity?

Answer Options

A. Returns to scale and the law of diminishing marginal productivity are mutually exclusive concepts.
Correct Answer B. Returns to scale and the law of diminishing marginal productivity are related, but not directly equivalent.
C. Returns to scale is a special case of the law of diminishing marginal productivity.
D. The law of diminishing marginal productivity is a necessary condition for returns to scale.
Correct Answer
B
Correct Option:
Returns to scale and the law of diminishing marginal productivity are related, but not directly equivalent.

About This Question

This is Post Utme Madonna University 2020 Economics Question 6. It is one of the objective questions from the 2020 Post Utme Madonna University Economics examination.

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