An ANOVA Works on the Basis of Comparing Systematic and Systematic

question 42

Multiple Choice

An ANOVA works on the basis of comparing systematic and systematic variance, but how is this achieved?

• A) Systematic variance / unsystematic variance
• B) Systematic variance × unsystematic variance
• C) Unsystematic variance / systematic variance
• D) Unsystematic variance - systematic variance

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes all variable and fixed costs.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Long-run Average Total Costs

The average cost per unit of output where all inputs, including capital, are variable and the firm has adjusted all inputs to find the lowest average cost.