Based on the Following Cost Data,items Labeled (A)and (B)in the Table

question 56

Multiple Choice

Based on the following cost data,items labeled (a) and (b) in the table below are which of the following amounts,respectively? $\begin{array}{|l|r|r|}\hline \text { Number of units: } & 1,500 & 3,000 \\\hline \text { Total cost: } & & \\\hline \text { Vanable } & \$ 7,500 & \$ 15,000 \\\hline \text { Fixed } & \$ 6,000 & \$ 6,000 \\\hline & & \\\hline \text { Cost per unit: } & & \\\hline \text { Vanable } & \$ 5 & \text { (a) } \\\hline \text { Fixed } & \$ 4 & \text { (b) } \\\hline\end{array}$

• A) (a)= $3.00;(b)= $3.00
• B) (a)= $5.00;(b)= $4.00
• C) (a)= $2.50;(b)= $2.00
• D) (a)= $5.00;(b)= $2.00

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Definitions:

Real Interest Rate

The rate of interest an investor expects to receive after allowing for inflation, reflecting the true cost of borrowing and the true yield on investments.

Equilibrium Interest Rate

The interest rate at which the demand for funds (borrowing) equates with the supply of funds (savings) in the financial market.

Demand for Loanable Funds

The desire for borrowing money, driven by the need for investment funds across the economy.

Quantity of Loanable Funds

This refers to the amount of money available for borrowing in the financial market at a particular rate of interest.