The Figure Given Below Shows Three Short Run Average Total

question 31

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-As the confectionary, Mrs. Fields' Cookies, gained popularity in California and decided to expand its operations to Utah, it was able to achieve economies of scale. This means that:

• A)property taxes were lower in its new location in Utah.
• B)transport and communication systems were more developed in Utah.
• C)wages were higher in Utah compared to California.
• D)expansion of output and firm size led to specialization among the workers.
• E)government policies were more favorable in Utah.

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Definitions:

Intercept

The value of the dependent variable when all independent variables in a model are set to zero.

Independent Variable

A variable that is manipulated or changed in an experiment to test its effects on a dependent variable.

Dependent Variable

The variable in an experiment that is expected to change in response to changes in the independent variable.

Slope

The measure of the steepness, incline, or grade of a straight line, reflecting the ratio of the vertical change to the horizontal change between two points on the line.