Use the Following Statements to Answer This Question: I

question 56

Multiple Choice

Use the following statements to answer this question: I. The long-run average cost (LAC) curve is the envelope of the short-run average cost (SAC) curves.
II) The long-run marginal cost (LMC) curve is the envelope of the short-run marginal cost (SMC) curves.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II are false.

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Definitions:

Drive-Reduction

A psychological theory that posits the reduction of physiological needs drives behavior, aiming to reduce the state of tension or arousal caused by unmet needs.

Homeostasis

The process by which a living organism or cell maintains stable internal conditions despite changes in its external environment.

Set-Point Theory

The hypothesis that the body regulates its weight and energy levels around a specific baseline, determined by genetics and environmental factors.

Fat Cells

Also known as adipocytes, these cells store energy in the form of fat and play an important role in energy balance.