The most likely explanation for economies of scale is

Which of the following production function would exhibit increasing returns to scale? f(K, L) = (K+ L)1/2 f(K, L) = K + L f(K, L) = K1/4+ [1/4 Of(K, L) = KIL None of the above

Label each of the following as sunk cost, opportunity cost, or incremental costs and briefly explain why:  (Chapter 2)    You are deciding which car to buy. Car A is $24,000 and car B is $32,000. The difference in price is $8,000. What kind of cost does this represent?   Answer:    Your company invested $300,000 into a study to determine the feasibility of introducing a new product line into the business. The study recommended 2 mutually exclusive feasible alternatives. What kind of cost does the $300K represent?   Answer:    You have 2 alternatives for a $10,000 investment. Investment A provides a $500 return and investment B provides a $700 return. If you choose Alternative B, what does the $500 return from Alternative A represent?   Answer:

Calculate a cost function from a production function and explain how economic costs differ from accounting costs.