A Firm's Marginal Cost Can Always Be Thought of as the Change

question 13

Multiple Choice

A firm's marginal cost can always be thought of as the change in total cost if

• A) the firm produces one more unit of output.
• B) the firm buys one more unit of capital.
• C) the firm's average cost increases by $1.
• D) the firm moves to the next highest isoquant.

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Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company, where the investment represents a significant influence over the investee.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after elimination of inter-company transactions and accounts.

Net Income

The amount of earnings left over after all expenses and taxes have been subtracted from total revenue.

Dividends

Payments made by a corporation to its shareholders, out of its profit or reserves, usually on a regular basis.