If Production Increases, Variable Cost Will

question 4

Multiple Choice

If production increases, variable cost will:

• A) remain constant on a per unit basis.
• B) increase by a variable amount.
• C) vary on a per unit basis.
• D) remain unchanged.

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Definitions:

Full Employment

An economic condition where all available labor resources are being used in the most efficient way possible, typically signifying a very low unemployment rate.

Productive Efficiency

A state where an economy or firm produces goods or services at the lowest possible cost, using all resources effectively.

Production Possibilities Curve

A graph that shows the various combinations of outputs that a society can produce given the available factors of production and technology.

Specialization

The process of focusing on a narrow area of expertise or production, enhancing efficiency and skill through the division of labor.