Use the Following to Answer Question

question 118

Multiple Choice

Use the following to answer question:

-(Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I.If the economy produces 10 units of capital goods per period,it also can produce,at MOST,_____ units of consumer goods per period.

• A)5
• B)4
• C)3

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Definitions:

Marginal Cost

The financial outlay for making an additional unit of a product or service.

Average Total Cost

The total cost divided by the number of goods produced; it includes all variable and fixed costs.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it varies with production levels.

Average Fixed Cost

The constant expenses associated with production, which remain unaffected by the amount of goods produced, divided by the number of items made.