One Reason Why Individuals with Greater Ability Often Receive Higher

question 14

Multiple Choice

One reason why individuals with greater ability often receive higher wage rates is that they

• A)face discrimination
• B)have low marginal products
• C)have high marginal revenue products
• D)face diminishing marginal returns
• E)often are employed in industries experiencing economies of scale

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Definitions:

Fixed Costs

Regular expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Capacity

The maximum amount or number that something can contain or accommodate.

Variable Costs

Costs that change in proportion to the level of production or sales volume.

Fixed Costs

Costs that do not vary with the level of output or activity, remaining constant over a period.