The Average Total Cost Curve Has a U Shape Because

question 17

Multiple Choice

The average total cost curve has a U shape because the ______ effect is dominant at low levels of output, and the _____ effect is dominant at high levels of output.

• A) diminishing returns; spreading
• B) spreading; diminishing returns
• C) comparative advantage; absolute advantage
• D) absolute advantage; comparative advantage

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Definitions:

Direction

A course along which something moves, points, or faces, often implying a trend or tendency in data, processes, or movements.

Scatterplot

A type of graph used in statistics to visually display and compare two variables for a set of data, showing how much one variable is affected by another.

Two-Way Table

A table that displays data about two categorical variables; used to explore the relationship between the two variables.

Scatterplot Strength

Indicative of the degree of correlation between two variables represented in a scatterplot, showing how closely the data points fit a trend line.