All of the Following Would Be Considered a Fixed Cost

question 119

Multiple Choice

All of the following would be considered a fixed cost for a bottled water company except:

• A) Rent on warehouse facility
• B) Depreciation on its manufacturing equipment
• C) Hourly wages for machine operators
• D) Property taxes on its factory building

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Definitions:

Budget Constraint

The limits imposed on household choices by income, prices, and taxes, defining the combination of goods and services they can afford.

Income

Proceeds obtained, often periodically, from labor or investment returns.

Utility

A measure of satisfaction or happiness that consumers derive from the consumption of goods and services.

Perfect Substitutes

Two goods that could be used in place of each other with no loss of utility to the consumer.