. In the law of _____, it is assumed that the factor ratio ______.
A. Returns to factor; remains constant
B. Returns to scale; always increases
C. Returns to factor; changes
D. Returns to scale; remains constant
Solution
In the law of return to scale it is assumed that the factor ratio remains constant
Also in the law of return to factor it is assumed that the factor ratio changes
So correct answers are both C and D.
In the law of return to scale it is assumed that the factor ratio remains constant
Also in the law of return to factor it is assumed that the factor ratio changes
So correct answers are both C and D.