The Table Below Shows a Pizzeria's Fixed Cost and Variable

question 82

Multiple Choice

The table below shows a pizzeria's fixed cost and variable cost at different levels of output. Pizza's sell for $20 each. $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Number of } \\\text { Pizzas Per Day }\end{array} & \begin{array} { c } \text { Fixed Cost } \\\text { (\$/Day) }\end{array} & \begin{array} { c } \text { Variable Cost } \\\text { (\$/Day) }\end{array} \\\hline 0 & 500 & 0 \\\hline 25 & 500 & 150 \\\hline 50 & 500 & 250 \\\hline 75 & 500 & 450 \\\hline 100 & 500 & 850 \\\hline 125 & 500 & 1,650 \\\hline\end{array}$$ When the pizzeria makes 100 pizzas a day, its fixed cost is ______ and its total cost is ______.

• A)$350; $850
• B)$500; $850
• C)$500; $1,350
• D)$850; $1,650

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Definitions:

Aggregate Demand Curve

A graph showing the relationship between the total demand for goods and services and the overall price level in the economy, all else being equal.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate reflection of an economy’s size and growth rate.

Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level in an economy and the total output produced by that economy at various price levels.

Price Index

A number that shows the average price of products; changes in a price index over time show changes in the economy’s average price level.