Zach and Mac Own an Auto Repair Business That They

question 346

Multiple Choice

Zach and Mac own an auto repair business that they operate as co-owners. Both take an active role in the management of the business, and each accepts unlimited liability. Zach and Mac operate as a __________.

• A) joint venture
• B) general partnership
• C) limited partnership
• D) cooperative

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Definitions:

Average Variable Cost

The cost that varies with the level of output, computed by dividing total variable costs by the quantity of output produced.

Total Cost

A comprehensive total of expenses involved in the creation of goods or services, covering both fixed and variable costs.

Diminishing Marginal Product

The principle that as additional units of a variable input are added to fixed inputs, the increase in output will eventually decrease.

Production Function

An equation expressing the relationship between inputs used in production and the output generated from those inputs.