As the Amount of a Variable Input Increases, While All

question 90

Multiple Choice

As the amount of a variable input increases, while all other inputs are held constant, total product will

• A) always increase.
• B) always decrease.
• C) initially decrease and then increase.
• D) initially increase and then decrease.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, typically resulting from increased production where the cost per unit of output drops as scale increases.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all and one person's use does not diminish another's.

Marginal Social Cost

The total cost to society of producing one additional unit of a good, including both the private costs and any external costs.

Efficient Level

An optimal point where resources are utilized in the most productive manner without waste, achieving the best outcome.