For a Construction Company That Builds Houses, Which of the Following

question 34

Multiple Choice

For a construction company that builds houses, which of the following costs would be a fixed cost?

• A)the $20 per hour wage paid to a construction foreman
• B)the $30,000 per year salary paid to the company's bookkeeper
• C)the $2 per worker-hour paid to the state government for workers' compensation insurance
• D)All of the above are correct.

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Definitions:

Adam Smith

A Scottish economist and philosopher, best known for his works "The Wealth of Nations," which laid the foundations for classical economics.

The Wealth of Nations

A seminal book by Adam Smith that laid the foundations of classical economics, emphasizing free markets, the division of labor, and the function of self-interest in commerce.

Free Economy

An economic system where transactions are under the control of private owners for profit rather than by the state.

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.