Question

In economics, a cost which must be paid regardless of the level of output production is called Select one: a zero marginal cost b. elastic overhead c. a fixed cost d diminishing returns When a technology improvement increases the output per employee, then the cost per unit of output will Select one: a decrease b. increase c. not change d become negative c

Answer 1

The correct answer is option c

Explanation:- A cost that a firm has to incur whether the production takes place or not is known as a fixed cost. The fixed cost of a firm consists of rent, salary paid to employees and they have to paid no matter whether the production takes place or not.

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The correct answer is option a

Explanation:- Technology improvement results in improvement of productivity which will increase the output per employee. Technology improvement can be in the form of new machinery or new processes that will facilitate in producing higher quantity of output at a lower cost. Thus technology improvement will result in decrease of per unit cost.