Angel Rodriguez Pulls Up in His 24-Foot Panel Truck in Front

question 119

Multiple Choice

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. Which of the following statements is TRUE about short run costs for Angel?

• A) His truck is a fixed cost and gasoline is a variable cost.
• B) His truck is a variable cost and gasoline is a fixed cost.
• C) Both his truck and gasoline is a variable cost.
• D) Neither his truck nor gasoline is a variable cost.

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Definitions:

Equity Investment

Funds invested in a company by purchasing shares of its stock, representing ownership interest.

Derivative

A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets—such as stocks, bonds, commodities, currencies, interest rates, or market indexes.

Equity Contracts

Agreements that represent ownership interest in a corporation, potentially including options, warrants, and other financial instruments.

Futures Contracts

Agreements to buy or sell an asset at a future date at a price agreed upon today, often used for hedging or speculating on price movements.