​Exhibit 3-13 -Refer to Exhibit 3-13. a Movement from Point D to Point

question 10

Multiple Choice

​Exhibit 3-13
-Refer to Exhibit 3-13. A movement from Point D to Point A:

• A)​increases efficiency by conserving resources.
• B)​requires the sacrifice of cupcakes in order to acquire more cakes.
• C)​requires the sacrifice of cakes in order to acquire more cupcakes.
• D)​decreases production of both cakes and cupcakes and would be inefficient.

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Definitions:

Primary

Refers to first in order, importance, or original sources of information obtained directly from first-hand experience or research.

Economies of Scope

Cost advantages that a business experiences by producing a wider variety of products, rather than specializing in the production or provision of a single product or service.

Diseconomies of Scale

A point at which a company grows so large that the costs per unit increase with the increase in production.

Experience Curve Effects

The reduction in unit costs of production as output increases, typically due to gained efficiencies and learning over time.