An Increase in Production in the Short Run Definitely Results

question 24

Multiple Choice

An increase in production in the short run definitely results in an increase in

• A)Average total costs.
• B)Marginal costs.
• C)Total costs.
• D)Average fixed costs.

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Definitions:

Escalating Cost Impact

The effect of costs increasing over time, often spiraling beyond original estimates, generally due to poor planning, scope creep, or unforeseen circumstances.

Satisficing

A decision-making strategy that involves searching for and choosing an acceptable or satisfactory response to a problem or scenario, rather than an optimal solution.

Anchoring and Adjustment Heuristic

A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

Representativeness Heuristic

A mental shortcut people use where the likelihood of an object belonging to a particular category is assessed based on how typical that object is thought to be of the category.