The Numerical Value of the Multiplier Will Be Smaller the

question 22

Multiple Choice

The numerical value of the multiplier will be smaller the

• A) larger the average propensity to consume.
• B) larger the slope of the saving schedule.
• C) larger the slope of the consumption schedule.
• D) smaller the slope of the saving schedule.

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Definitions:

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Efficient Scale

The level of production at which a firm operates with the lowest average total costs, achieving economies of scale without incurring diseconomies of scale.

Short-Run Cost Curves

Graphical representations that show the relationship between a firm's costs and output levels in the short term.

Long-Run Curve

The graphical representation in economics of the relationship between output and input when all inputs are variable, showing potential economies of scale.