SaskWidget Produces Plastic Parts

question 66

Multiple Choice

SaskWidget produces plastic parts. At the beginning of the year, they held $24 million worth of capital. At the end of the year, they held $20 million worth of capital. One can conclude that

• A)net investment increased by $4 million.
• B)gross investment decreased by $4 million.
• C)gross investment increased by $4 million.
• D)depreciation exceeded gross investment by $4 million.
• E)depreciation equals $4 million.

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Definitions:

Average Fixed Costs

The total fixed costs divided by the quantity of output produced, indicating the cost per unit that does not change with output level.

Average Total Costs

The cost of producing each unit, calculated by dividing the entire production cost by the total number of units made.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.