Use the Following to Answer Questions

question 77

Multiple Choice

Use the following to answer questions .
Exhibit: Stages in the Production of an Office Building

-(Exhibit: Stages in the Production of an Office Building) A mining firm extracts iron from the earth. A steel mill converts the iron to steel beams for use in construction. A construction company uses the steel beams to make a building. Assume that the total product of these firms represents the only components of the building and that they will have no other uses. What is the value added by Fuller Mill?

• A) $325,000
• B) $225,000
• C) $125,000
• D) $100,000

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the per unit cost as output increases.

Output

The total amount of goods or services produced by an individual, firm, or country within a given period.

Compact Disc Inputs

Not a standard economic key term, likely refers to inputs required for the production of compact discs as part of a business's operations.

Larger Percentage Increase

A situation where the rate of increase in a particular variable is higher relative to other comparable measures or periods.