If the Minimum Efficient Scale in Toaster Production Is 500

question 131

Multiple Choice

If the minimum efficient scale in toaster production is 500, 000 units per year,

• A)the average cost of producing 300, 000 toasters is greater than the average cost of producing 500, 000
• B)the average cost of producing 300, 000 toasters is equal to the average cost of producing 500, 000
• C)the total cost of producing 300, 000 toasters is greater than the total cost of producing 500, 000
• D)the firm should not produce more than 500, 000 toasters
• E)MC exceeds AC at 500, 000 toasters

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Definitions:

Colonization Society

Often refers to organizations like the American Colonization Society, founded in the early 19th century to support the migration of free black people to Africa.

Economic Inefficiency

A situation where resources are not allocated optimally, leading to waste or a failure to achieve potential output or welfare.

Indian Removal

A 19th-century policy of the United States government aimed at relocating Native American tribes from their ancestral lands in the eastern U.S. to territories west of the Mississippi River.