Variable Cost of Production

question 57

Multiple Choice

Variable Cost of Production

The following questions refer to the following table which shows a firm's variable costs of production.


-Refer to Variable Cost of Production.For what levels of output does the firm experience diminishing marginal returns?

• A) For all levels of output.
• B) For the first,second,and third units of output.
• C) Beyond the third unit of output.
• D) For the fifth and all subsequent units of output.

---

Definitions:

MPC

Marginal Propensity to Consume; the proportion of additional income that a consumer spends on goods and services rather than saving it.

Multiplier

In economics, a factor by which an initial change in spending is magnified or multiplied in the overall economy.

Automatic Stabilizer

Economic policies and programs, such as unemployment insurance, that automatically adjust to counteract economic fluctuations without the need for explicit government intervention.

Automatic Stabilizers

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust with economic conditions to stabilize income and spending.