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:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology, etc.), assuming all resources are fully and efficiently utilized.

Labor Force

The total number of people who are employed and those actively seeking employment in an economy.

Bowed Out

A term used to describe the shape of a production possibilities frontier that demonstrates increasing opportunity costs.

Resources

This term refers to assets, materials, and components that can be used to produce goods and services.