As Output Increases, Average Fixed Costs

question 272

Multiple Choice

As output increases, average fixed costs

• A) decrease.
• B) initially decrease and then increase.
• C) remain constant.
• D) increase.

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Definitions:

Compensating Differentials

Wage differences across jobs that reflect the fact that some jobs are less pleasant or more dangerous than others.

Less Pleasant

A descriptor indicating a lower level of enjoyment, satisfaction, or agreeableness compared to another option or situation.

Minimum Wage

The lowest legal wage that can be paid to workers, set by government law or regulation.

Equilibrium Market Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in a given market.