Table 13-3
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-As Bubba's Bubble Gum Company Adds Workers

question 257

Multiple Choice

Table 13-3
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$$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of workers) }\end{array} & \begin{array} { c } \text { Output } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Fixed Cost } \\\text { (Dollars) }\end{array} & \begin{array} { c } \text { Variable Cost } \\\text { (Dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (Dollars) }\end{array} \\\hline 0 & 0 & 50 & 0 & 50 \\\hline 1 & 90 & 50 & 20 & 70 \\\hline 2 & 170 & 50 & 40 & 90 \\\hline 3 & 230 & 50 & 60 & 110 \\\hline 4 & 240 & 50 & 80 & 130 \\\hline\end{array}$$ ​
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-As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

• A)economies of scale.
• B)diseconomies of scale.
• C)increasing marginal product.
• D)diminishing marginal product.

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Definitions:

Attractiveness

The quality that makes something appealing or desirable.

Production Function

An equation that specifies the output that a firm can produce with various combinations of inputs, reflecting the relationship between input and output quantities.

Service Firms

Businesses that primarily offer intangible products, such as services or expertise, to their customers.