Returns to Scale Returns to scale is a concept that tries to explain the behaviour of the output in relation to the change in the total scale of operations of the firm. A change of scale of operations means a change in the total size of the firm‚ i.e. a change in both labour and capital of the firm. For determining the returns to scale‚ we need to calculate the Output Elasticity where: Output Elasticity = % change in Output/% change in all inputs The different types of returns to scales
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THE LAWS OF RETURN TO SCALE The laws of return to scale explain the behavior of output in response to a proportional and simultaneous change in input. Increase in inputs proportionately and simultaneously is in fact expansion of the scale of production. Statement: “As a firm in the long run increases the quantities of all factors employed‚ other things being equal‚ the output may rise initially at a more rapid rate than the rise of increase in inputs‚ then output may increase in the same proportion
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The law of diminishing returns only applies in the Short Run‚ when only one factor of production is variable and can be increased. The other factors of production are fixed. Thus as the variable factor of production is increased the marginal product of that factor will rise at first‚ but will at some point begin to fall. Returns to scale can only occur when no factors of production are fixed. If the quantities of all of the factors of production are increased‚ then output will also increase. However
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Distinguish between diminishing returns and economies of scale (15 marks) In Business Economics‚ the short run is defined as the concept that within a certain period of time‚ in the future‚ at least one input is fixed while others are variable and the long run is defined as a period of time in which all factors of production and costs are variable. The law of diminishing returns is a short run concept‚ which states that increasing successive units of a variable factor to a fixed factor
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Types of Measurement Scales Marc Waters MKT/441 June 9‚ 2014 Cyndie Shadow Types of Measurement Scales Introduction For this week’s assignment‚ students are to select four types of types of measurement increasing order of sophistication; they are Nominal‚ Ordinal‚ Interval‚ and Ratio. These are categories in which numbers are grouped. This paper will also demonstrate how they can be effective in surveys or questionnaires. Nominal The number we assign to some object‚ idea‚ or behavior is
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Explain how the law of diminishing returns and returns to scale affect a firm’s cost of production (20 Marks) The law of diminishing returns exist when increasing quantities of a variable input are combined with a fixed input‚ which eventually leads to the marginal product and the average product of that variable input will decline. Diminishing returns can affect a firms cost of production negatively in the short run. An example of this is that a business had 2 factors of production; Capital‚ which
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The SAS System 21:44 Wednesday‚ November 26‚ 2014 Obs date refd_1st_lag refd_1st_diff refd_1st_diff_1st_lag refd_1st_diff_2nd_lag 1 30MAR1990 . . . . 2 29JUN1990 . . . . 3 28SEP1990 . . . . 4 31DEC1990 -0.19835 0.42248 . . 5 29MAR1991 0.22413 -0.16683 0.42248 . 6 28JUN1991 0.05730 -0.20439 -0.16683 0.42248 7 30SEP1991 -0.14709 0.20291 -0.20439 -0.16683 8 31DEC1991 0.05581 -0.02545 0.20291 -0.20439 9 31MAR1992 0.03037 -0.13786 -0.02545 0
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Decrease in the amount of nuclear families There are several possible reasons for the decrease in the number of nuclear families‚ particularly in the past forty years. This includes rising cohabitation‚ higher divorce rates‚ secularisation‚ rising same sex relationships‚ more career seekers and the rise in feminism. Firstly‚ a nuclear family is a family consisting of a man and woman (usually married) in a sexual relationship with one or more children. One reason for this type of family becoming
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some idea of how many juveniles were handled by the adult criminal justice system ("Alaska Juveniles Waived into the Adult System‚" 1998). Implementing the 2 types of juvenile waivers has proven inconclusive as to whether or not there has been a decrease in juvenile crime. Threatening a juvenile that they will be waived to adult status and held accountable to the same standards as an adult has not proven to be a deterrent to juvenile criminals. When
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Decrease CLABSI in the NICU GCU Nursing Leadership and Management December 12‚ 2012 Decrease CLABSI in the NICU The purpose of this initiative is to decrease and/or eliminate central line-associated bloodstream infections (CLABSI) in the neonatal intensive care unit (NICU) at Aurora Bay Care Medical Center. Hospital acquired infections‚ including CLABSI‚ is a major cause of mortality‚ prolonged hospitalization‚ and extra costs for NICU patients (Stevens & Schulman‚ 2012). The goal of
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