Diminishing Returns to Specialization Occur When

question 86

Multiple Choice

Diminishing returns to specialization occur when

• A)resources can move freely from the production of one good to another within a country.
• B)more units of resources are required to produce each additional unit.
• C)the cost of producing goods reduces substantially with increase in number of goods produced.
• D)the quality of resources comes down as a result of producing more goods.
• E)the quality of goods produced per unit of resource begins to improve.

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Definitions:

Average Total Cost

The average expense for each unit of output, calculated by dividing the overall production cost by the total number of units produced.

Average Fixed Cost

The cost that remains constant per unit of output as total production increases or decreases.

Minimum Point

The lowest point on a curve, often related to economic graphs such as cost curves, indicating the least quantity of cost or effort.

Marginal Cost

The additional cost incurred from producing one more unit of a product or service.