Which of the Following Statements Is TRUE

question 246

Multiple Choice

Which of the following statements is TRUE?

• A) Average fixed cost equals average total cost plus average variable cost.
• B) Average variable cost is always greater than average fixed cost.
• C) Average fixed cost equals total fixed cost divided by total output.
• D) Average total cost always falls as output increases.

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Definitions:

Opportunity Costs

The advantages or gains a person, investor, or company forgoes by selecting one option instead of another.

Economic Resources

Resources required for the production of goods and services, including labor, capital, land, and entrepreneurship.

Production Possibilities

The various combinations of goods and services that can be produced in a given timeframe, using all available resources and technology.

Economizing Problem

The fundamental economic issue of meeting people's virtually unlimited wants with scarce resources, requiring choices and priorities in resource allocation.