The all-American baseball is made using cork from Portugal, rubber from Malaysia, yarn from Australia, and leather from France, and it is stitched

(108 stitches exactly) by workers in Costa Rica. To assemble a baseball takes one unit of each of these inputs. Ultimately, the finished product must be shipped to its final destination—say, Cooperstown, New York. The materials used cost the same in any location. Labor costs are lower in Costa Rica than in a possible alternative manufacturing site in Georgia, but shipping costs from Costa Rica are higher.

Would you expect the production function to exhibit decreasing, increasing, or constant returns to scale? What is the cost function? What can you conclude about shipping costs if it is less expensive to produce baseballs in Costa Rica than in Georgia?