A Cost That Could Not Possibly Be Classified as Irrelevant

question 60

Multiple Choice

A cost that could not possibly be classified as irrelevant to a business decision is known as:

• A)a fixed cost.
• B)a sunk cost.
• C)a differential cost.
• D)a variable cost.

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Definitions:

Marginal Rates of Substitution

The speed at which a buyer is prepared to sacrifice one item for another while keeping their satisfaction constant.

Bads

Are items that people do not desire to have, opposite to goods, which have a negative impact on utility when consumed.

Indifference Curves

Graphical representations in microeconomics showing different bundles of goods between which a consumer is indifferent.

Indifference Curves

Indifference Curves represent combinations of two goods that provide the consumer with the same level of satisfaction or utility, illustrating trade-offs in consumption choices.