Recall the Application About the Time and Invested Funds That

question 114

Multiple Choice

Recall the Application about the time and invested funds that are involved in starting a decorative
bottle-cap pin business to answer the following question(s) .
-The current income Betty would sacrifice to start her own decorative bottle-cap pin business reflects the

• A)opportunity cost of invested funds.
• B)opportunity cost of her starting a business.
• C)cost of doing business.
• D)present value of her initial investment.

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Definitions:

Total Variable Costs

The sum of all costs that vary with the level of output or production, such as materials and labor, as opposed to fixed costs which remain constant regardless of the level of production.

Average Fixed Cost

The steady costs associated with production, irrespective of output volume, divided by the number of units produced.

Marginal Cost

The added cost faced when one additional unit of a product or service is produced.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes both fixed and variable costs.