Exhibit 18

question 1

Multiple Choice

Exhibit 18.2.The following table includes the information about a monthly time series. Refer to Exhibit 18.2.When the exponential smoothing method with α = 0.1 and α = 0.5 is applied,what is the speed of decline for which the mean absolute deviation (MAD) is better? What is this mean?

• A)α = 0.1 and MAD = 3.05
• B)α = 0.1 and MAD = 3.00
• C)α = 0.5 and MAD = 3.00
• D)α = 0.5 and MAD = 3.05

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Definitions:

ATC

Average Total Cost, the sum of all production costs divided by the quantity of output produced, reflecting the average cost per unit of output.

AVC

Average Variable Cost is the total variable cost per unit of output, which is calculated by dividing total variable costs by the quantity of output.

MC

Marginal Cost, the increase or decrease in the total cost of a production run for making one additional unit of an item.

Long Run

A period in economic analysis where all factors of production can be varied, and no inputs are fixed.