When a Firm Increases the Amount of Capital It Uses

question 17

Multiple Choice

When a firm increases the amount of capital it uses, the

• A)average total cost curve shifts down.
• B)average total cost curve shifts up.
• C)average total cost curve twists, increasing ATC at low output levels and decreasing ATC at high output levels.
• D)average variable cost curve shifts up.
• E)average fixed cost decreases.

Understand accounting and reporting practices for capital assets and related contributions in not-for-profit organizations.

Comprehend the requirements and methods for accounting for donated goods and services in not-for-profit organizations.

Identify the purposes of using an encumbrance system in budgeting and accounting for not-for-profit entities.

Apply knowledge of differences between not-for-profit organizations and business enterprises in financial reporting.

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, indicating an improvement in the country's economic health.

Resource Allocation

The process of distributing available resources among various competing needs or uses in order to achieve desired objectives.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for any given quantity produced of another good, given the resources and technology available.

Technological Change

The development and application of new technologies and methods in production, often leading to increased efficiency and productivity.