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:

Computer

An electronic device capable of processing, retrieving, and storing data, executing programmed instructions to perform a wide range of tasks.

Unlimited Wants

The economic concept that humans have a never-ending series of desires that cannot be fully satisfied.

Resources

The assets, materials, and inputs used by individuals or societies to produce goods and services.

Skilled Labor

Workers who have specialized skills, training, or education that allow them to perform complex job tasks effectively.