Refer to Table 7-4

question 32

Multiple Choice

Refer to Table 7-4. If the output equals five watches per week, what is the average fixed cost and average variable cost of production?

• A) AFC is $50 and AVC is $45
• B) AFC is $9 and AVC is $10
• C) AFC is $10 and AVC is $9
• D) AFC is $45 and AVC is $50

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Definitions:

Interaction Variables

Variables that modify the relationship between other variables in the context of statistical analysis, showing how the effect of one variable depends on the level of another variable.

Dependent Variable

A variable in research that is expected to change as a result of manipulations in the independent variable.

Independent Variable

A variable that is manipulated in an experiment to determine its effect on the dependent variable.

Cause-and-Effect Relationship

A connection between two events where one (the cause) directly results in the occurrence of the other (the effect).