Jeremy Rhodes Leases a Manufacturing Facility That Produces Computer Keyboards

question 56

Multiple Choice

Jeremy Rhodes leases a manufacturing facility that produces computer keyboards. Jeremy tries to keep production high, because his lease payments are $6,200 a month, regardless of whether he produced one computer keyboard a month or 10,000. Jeremy's lease payment is a:

• A) variable cost
• B) secondary cost
• C) fixed cost
• D) marginal cost
• E) tangible cost

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Definitions:

Maximize Utility

The process or goal of obtaining the highest level of satisfaction or benefit from consuming goods and services, given a consumer's limitations, such as income or resources.

Income

The financial gain received by an individual or entity, typically measured over a period of time, deriving from labor, investment, or business ventures.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.

Money Income

The total amount of monetary earnings received by an individual or household before any deductions like taxes or social security contributions.