Which of the Following Defines Variable Cost Behavior

question 54

Multiple Choice

Which of the following defines variable cost behavior?
Total cost reaction          Cost per unit reaction
to increase in activity      to increase in activity

• A)remains constant remains constant
• B)remains constant increases
• C)increases increases
• D)increases remains constant

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Definitions:

Budget Constraint

A line representing the combination of goods and services that a consumer can purchase with a given income.

Utility Function

A mathematical representation of how consumers derive satisfaction or utility from consuming goods and services.

Goods

Tangible products or items that satisfy human wants or needs.

Budget Constraint

An economic model that represents all the combinations of goods and services that a consumer can afford with a fixed amount of income.