Suppose the Total Output Curve Increases at an Increasing Rate

question 261

Multiple Choice

Suppose the total output curve increases at an increasing rate for workers 1-50, increases at a decreasing rate from workers 51-101, and decreases beyond 101 workers. We would know that

• A) marginal product is increasing from workers 1-50 and then becomes negative after worker 51.
• B) marginal product is increasing from workers 1-50, decreasing after 51 workers, and becomes negative after the 101st worker.
• C) marginal product is decreasing from workers 1-101, becoming negative at the 102nd worker.
• D) marginal product is increasing from workers 1-50, constant from workers 51 to 101, and is decreasing after that.

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Definitions:

Annual Sales

The total revenue generated from the sale of goods or services in one fiscal year.

Variable Expenses Per Unit

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs per unit.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, insurance, and salaries, providing predictability in budgeting.

Break-even

The point at which total costs equal total revenues, meaning there is no profit or loss.