Average Total Cost Tells Us the

question 511

Multiple Choice

Average total cost tells us the

• A)total cost of the first unit of output, if total cost is divided evenly over all the units produced.
• B)cost of a typical unit of output, if total cost is divided evenly over all the units produced.
• C)cost of the last unit of output, if total cost does not include a fixed cost component.
• D)variable cost of a firm that is producing at least one unit of output.

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Definitions:

Utility Function

A formula that quantifies the happiness or satisfaction received from consuming certain amounts and combinations of goods and services.

Endowed

Furnished or provided with a particular quality, ability, or asset.

Contract Curve

In an Edgeworth Box diagram, the locus of points representing the set of mutually beneficial allocations between two parties.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources between two consumers on a two-good world, demonstrating how trade can lead to Pareto improvements.