A Firm That Is Able to Utilize More Efficiently Its

question 237

Multiple Choice

A firm that is able to utilize more efficiently its inputs as it increases production in the long run is an example of:

• A)economies of scale.
• B)diseconomies of scale.
• C)labor-intensive production.
• D)capital-intensive production.

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Definitions:

Fixed Overhead

Regular, ongoing costs that are not affected by the level of production or sales, such as rent, salaries, and insurance.

Direct Materials

Raw materials directly used in the manufacturing of a product, which are easily traceable to the finished product.

Incremental Profit

The additional profit that is generated by undertaking a particular action, such as producing an additional unit of product.

Organic Milk

Milk produced by livestock that has been fed organic feed, without the use of antibiotics or growth hormones, and typically adheres to specific standards for organic farming.