Suppose That the Price of a Bag of Jellybeans Is

question 455

Multiple Choice

Suppose that the price of a bag of jellybeans is $6, and the price of a bottle of Jolt cola is $2. The relative price of Jolt cola is

• A) 3 bags of jellybeans per bottle of Jolt cola.
• B) 2 bags of jellybeans per bottle of Jolt cola.
• C) 1/3 bag of jellybeans per bottle of Jolt cola.
• D) $2.

---

Definitions:

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Cost

A fixed cost is an expense that does not change with the level of goods or services produced by a business, such as lease payments or insurance premiums.

Sunk Cost

A sunk cost is a past expense that has already been incurred and cannot be recovered. Businesses cannot alter these costs with future decisions.

Uncontrollable Cost

Expenses that cannot be changed or influenced by the actions of a particular department or manager.