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A politician, who wants to receive the maximum number of votes, spends 9 hours a week speaking to various groups. The table below shows his estimates of how time spent with each group will affect the number of votes he receives:
-How many EXTRA votes will the politician receive if he devotes one more hour to speaking engagements (i.e., speaks 10 instead of 9 hours per week) ?
Total Fixed Costs
The sum of all costs that remain constant regardless of any change in a company's production volume.
Diminishing Returns
A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.
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.
Average Variable Costs
represent the variable costs (costs that change with output level) per unit of output, calculated by dividing the total variable costs by the quantity of output produced.
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