Multiple Choice
Which type of tax is typically paid to a third party, rather than directly to the government?
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0. Basic Principles of Economics
Introduction to Economics
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following best defines average variable cost in economics?
A
The change in total cost resulting from producing one more unit of output
B
The total fixed cost divided by the quantity of output produced
C
The total variable cost divided by the quantity of output produced
D
The total cost divided by the quantity of output produced
Verified step by step guidance1
Understand that Average Variable Cost (AVC) measures the variable cost per unit of output produced.
Recall that Total Variable Cost (TVC) includes costs that change with the level of output, such as labor and raw materials.
Recognize that AVC is calculated by dividing the Total Variable Cost by the quantity of output produced, expressed as \(\\text{AVC} = \\frac{\\text{TVC}}{Q}\), where \(Q\) is the quantity of output.
Differentiate AVC from other cost concepts: Marginal Cost (change in total cost from one more unit), Average Fixed Cost (total fixed cost divided by quantity), and Average Total Cost (total cost divided by quantity).
Conclude that the best definition of Average Variable Cost is the total variable cost divided by the quantity of output produced.
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