Which of the Following Was Mentioned as an Example of a Situational

question 222

Multiple Choice

Which of the following was mentioned as an example of a situational characteristic that influences decision criterion?

• A) the person's tendency to say "yes"
• B) the costs associated with uncertainty
• C) the costs associated with an incorrect decision
• D) the person's tendency to say "no"

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Definitions:

Total Fixed Costs

The sum of all costs that remain constant regardless of any change in a company's production volume.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out.

Average Variable Costs

represent the variable costs (costs that change with output level) per unit of output, calculated by dividing the total variable costs by the quantity of output produced.