Teacher Salaries Are 70% of the Cost of Educating a Sixth

question 14

Multiple Choice

Teacher salaries are 70% of the cost of educating a sixth grader. The demand for teachers is most likely to be

• A) elastic.
• B) inelastic.
• C) unitary elastic.
• D) horizontal.

---

Definitions:

Committed Fixed Costs

Investments in facilities, equipment, and basic organizational structure that can’t be significantly reduced even for short periods of time without making fundamental changes.

Short Term

A time period typically lasting less than one year, used to evaluate financial performance, investments, and objectives that are expected to be achieved within a brief timeframe.

Step-Variable Cost

A cost that remains constant for a certain level of activity, but changes in step fashion once a certain threshold is surpassed.

Activity

An event that causes the consumption of overhead resources.