Suppose We Are Considering the Relationship Between Two Variables Y

question 639

Multiple Choice

Suppose we are considering the relationship between two variables y and x. y is measured on the y- axis and x is measured on the x- axis, and the relationship between then is a line. Suppose that the slope of the line is positive and is less than 1. This slope means that a change in x is associated with

• A) no change in y.
• B) a smaller change in y.
• C) a bigger change in y.
• D) an equal change in y.

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Definitions:

Total Fixed Costs

The sum of all costs that do not change with the level of production or services provided, such as rent and salaries.

Average Variable Cost

The total variable cost of producing a good divided by the quantity of the good produced, representing the variable cost per unit.

Average Total Costs

The total costs of production (fixed plus variable) divided by the total quantity of output produced, expressing the cost on a per-unit basis.

Economies of Scale

The savings that organizations achieve through their size of operation, where the expense per produced unit consistently decreases with an upscaling in operation.