Once the Project Is Approved and Moves into the Planning

question 59

Multiple Choice

Once the project is approved and moves into the planning stage, _____.

• A) agreements for risk sharing need to be concluded
• B) the total risk on the project typically reduces as activities are performed without loss
• C) risks must be weighed against the potential benefit of the project's success in order to decide if the project should be chosen
• D) risks are identified with each major group of activities
• E) a risk response plan can be used to identify increasing levels of detailed risk analysis

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Definitions:

Long-Run Cost Curve

A graph showing the lowest cost at which a firm can produce any given level of output in the long run, when all factors of production are variable.

Average Total Cost

The total cost of production (including fixed and variable costs) divided by the number of units produced, indicating the per-unit cost of production.

X-Inefficiency

Inefficiency in an organization's allocation of resources due to a lack of competitive pressure, often leading to higher costs and lower output.

Profit-Maximizing Output

The point of production where a company reaches its maximum profit potential.