Which Costs Will Change with a Decrease in Activity Within

question 277

Multiple Choice

Which costs will change with a decrease in activity within the relevant range?

• A) Total fixed costs and total variable cost.
• B) Unit fixed costs and total variable cost.
• C) Unit variable cost and unit fixed cost.
• D) Unit fixed cost and total fixed cost.

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Definitions:

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, using fewer resources.

Textiles

Materials made from fibers, filaments, threads, or yarns, typically used in the production of fabrics and cloth.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost compared to others.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.