Which One of the Following Statements Is the MOST Accurate

question 62

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) The sale of a used textbook does generate income for factors of production.
• B) The sale of a used textbook does not generate income for any factor of production.
• C) The sale of a used textbook sometimes does and sometimes does not generate income for factors of production.
• D) It is hard to tell whether a sale of a used textbook does or does not generate income for factors of production.
• E) The sale of a used textbook is a part of the GNP.

---

Definitions:

Diseconomies of Scale

The situation where long-run average costs start to increase as the scale of operation grows beyond a certain point, leading to increased per-unit costs.

Diminishing Returns

A principle in economics indicating that adding more of one factor of production, while holding others constant, will at some point yield lower incremental per-unit returns.

Constant Costs

Costs that remain the same in total, regardless of changes in the volume of goods or services produced.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced; it shows the variable cost per unit.