If Activity Level Decreases,what Happens to the

question 153

Multiple Choice

If activity level decreases,what happens to the

• A)It decreases.
• B)It increases.
• C)It remains the same.
• D)It depends on how much the activity level increases.

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Definitions:

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good or service.

Marginal Benefit

The extra utility or satisfaction that is derived from the consumption or manufacture of one more unit of a good or service.

Marginal Cost

The growth in complete cost caused by the manufacture of one more unit of a good or service.

Artificially Scarce Good

A product or service whose availability is limited due to artificial constraints, such as legal restrictions or monopolistic practices, rather than natural scarcities.