Fixed Costs

question 9

Multiple Choice

Fixed costs:

• A)Are a constant percentage of sales revenues
• B)Vary with the level of depreciation expense
• C)Are constant with changes in the level of output
• D)Are inversely related to the level of output

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Definitions:

Marginal Utility

The additional contentment a customer derives by consuming one more unit of a product or service.

Demand

The desire and ability of consumers to purchase goods and services at various price levels.

Budget Line

A budget line represents the combination of goods and services that a consumer can purchase given their income and the prices of those goods and services.

Consumer's Equilibrium

A state where an individual allocates their income in a way that maximizes their satisfaction or utility, given their budget.