The Output Elasticity of Total Cost Is Equal To

question 58

Multiple Choice

The output elasticity of total cost is equal to:

• A)the slope of the isocost line.
• B)the ratio of marginal cost to average cost.
• C)the ratio of average cost to marginal cost.
• D)the ratio of average cost to total cost.

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Definitions:

Indifference Curves

Graphical representations used in microeconomics to show combinations of two goods that provide equal satisfaction and utility to a consumer.

Budget Lines

A graphical representation of all possible combinations of two goods which a consumer can purchase at given prices and within the constraints of his/her income.

Budget Line

A visual representation of all the different combinations of two products that can be bought within a certain budget and price range.

Indifference Curve

A chart illustrating various pairings of two products that deliver the same level of enjoyment and usefulness to a buyer.