When the Production of a Good Involves Several Inputs and Inputs

question 127

Multiple Choice

When the production of a good involves several inputs and inputs are used in fixed proportions,an increase in the cost of one input will usually cause total costs to

• A) rise more than in proportion.
• B) rise less than in proportion.
• C) remain unchanged.
• D) rise by the exact amount of the input price increase.

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Definitions:

Existing Duty

An obligation that a party is already legally bound to under the terms of a contract or by law.

Quantum Meruit

A legal principle where a person is compensated for services or goods provided when no contract exists, based on the value of the work done.

Satisfaction of Debt

The fulfillment or payment of a debt in its entirety, releasing the debtor from further obligations.

Common Law

A legal system based on customs and court rulings rather than written laws, where the principle of precedent guides future judicial decisions.