A Firm's Total Fixed Cost (TFC) Is a Cost

question 351

Multiple Choice

A firm's total fixed cost (TFC) is a cost

• A) it is certain ("fixed") that the firm must pay.
• B) that does not change as output changes.
• C) that is dependent on marginal cost.
• D) that is paid in only the long run.

Understand the principles of crafting effective definitions, including avoiding circularity, vagueness, and obscurities.

Identify the use of negative terms in definitions and when they are acceptable.

Distinguish between logical, obscure, metaphorical, and vague definitions.

Recognize the importance of the genus and differentia in creating definitions.

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Definitions:

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.

Cash Dividends

Payments made by a corporation to its shareholder members. It denotes the distribution of a portion of the company's earnings.

Home Mortgage Securitization

The process of bundling home loans into securities that are then sold to investors.

Mortgage Originators

Mortgage Originators are institutions or individuals that work with borrowers to complete a mortgage transaction, including the creation and processing of home loans.