A Consumer Has Had a Car for 10 Years and He

question 24

Multiple Choice

A consumer has had a car for 10 years and he thinks it's getting old. Which state does this describe in regard to this consumer's automobile?

• A) ideal
• B) personal
• C) current
• D) actual

---

Definitions:

Explicit Costs

Direct, out-of-pocket payments made for operations or production, such as wages, rent, and materials.

Average Fixed Cost

The constant expenses associated with production (expenses unaffected by output levels) divided by the volume of production.

Total Fixed Cost

The sum of all costs that do not change with the level of output or activity over a short period, such as rent, salaries, and equipment maintenance costs.

Average Total Cost

The total cost of production divided by the number of units produced.