With a Fixed Amount of Capital, 300 Workers Produce 9,000

question 106

Multiple Choice

With a fixed amount of capital, 300 workers produce 9,000 cars. The average labor productivity is

• A) 0.03.
• B) 3.
• C) 27.
• D) 30.

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Definitions:

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if a particular activity is discontinued.

Irrelevant Costs

Costs that should not influence decision-making because they will not change regardless of the outcome.

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered or altered by current or future actions.

Decision Making

Selecting a course of action from competing alternatives.