Abram Is Excited Because He Has Just Signed an Agreement

question 176

Multiple Choice

Abram is excited because he has just signed an agreement to purchase steel frames from a company at an excellent price and of very high quality.Once the contract begins, Abram eagerly awaits the first shipment, but it arrives a month behind the agreed-upon schedule, which slows down production at the plant.Abram is furious because he realises too late that this supplier

• A) produces poor quality.
• B) has bad credit terms.
• C) is unreliable.
• D) is not as inexpensive as he thought.
• E) is unscheduled.

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Definitions:

Marginal Product

The additional output produced as a result of utilizing one more unit of a particular input, holding all other inputs constant.

Labor Input

The total hours worked by employees or the effort exerted by workers in the production of goods and services.

Output

The total amount of goods or services produced within a given period by a firm, industry, or economy.

Returns To Scale

The change in output resulting from a proportional change in all inputs (factors of production) in the long term, indicating whether the output increases, decreases, or stays the same.