The Below Figure Shows the Various Combinations of the Goods

question 30

Multiple Choice

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-Fixed costs are costs paid for:

• A)medical reimbursements and health insurance of workers.
• B)obsolete plant and equipment not used anymore.
• C)plant and equipment in the long run.
• D)hiring temporary workers.
• E)resources that do not change with changes in output.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, due to the scale of operation increasing.

Opportunity Cost

The abandonment of potential improvements from other possibilities once one choice is made.

Absolute Advantage

A country's ability to produce a good more efficiently than other countries, requiring fewer resources for the same output.

Autarky

National self-sufficiency; no economic interaction with foreigners.