Services Are Now a Larger Part of the U

question 166

Multiple Choice

Services are now a larger part of the U.S. gross domestic product (GDP) than goods. The growth of the service sector is the result of

• A) changes in the service mix and the decline in goods production.
• B) goods representing a larger part of the gross domestic product than services.
• C) changes in the way service consumers make purchase decisions and the ways in which the marketing mix is used for services.
• D) increased demand for services that have been available in the past and the increasing interest in new services.
• E) the imbalance between exported merchandise and commercial services.

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Definitions:

Optimal Capital/Labor Ratio

The most efficient mix of capital and labor that maximizes output or minimizes cost for producing a given level of output.

Production Function

An equation that describes the maximum output of a firm, given the quantity of inputs.

Variable Cost Function

A mathematical representation of the costs that vary with the level of output or activity, unlike fixed costs.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of something changes as the quantity produced increases.