Suppose a Factory That Produces Toasters Experiences a Decline in Its

question 50

Multiple Choice

Suppose a factory that produces toasters experiences a decline in its average total cost with no change in its output level. This decline might be explained by:

• A) economies of scale.
• B) decreasing marginal utility.
• C) increasing marginal productivity.
• D) technological change.

---

Definitions:

Surplus Of Labor

A situation where the supply of labor exceeds the demand for it, typically resulting in unemployment or lower wages.

Minimum Wage

The lowest remuneration that employers can legally pay their workers, intended to protect employees from unduly low pay.

Demand For Labor

The total amount of workers that employers are willing and able to hire at a given wage rate, in a given period.

Union Shop

A workplace where employees are not required to join the union in order to be hired but must join soon after they begin employment.