Which Statement Is True

question 194

Multiple Choice

Which statement is true?

• A)Fixed cost rises as output rises.
• B)Variable cost falls as output rises.
• C)In the short-run,at an output of zero,total cost = zero.
• D)None of these statements are true.

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Definitions:

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income, positing that people increase their consumption as income rises, but not necessarily by the same amount.

Aggregate Income

The total income earned by all individuals in an economy from all sources, including wages, rental income, and investment income, during a given time period.

Aggregate Consumption

The total amount of goods and services consumed in an economy over a specific time period.

Consumption Function

A formula in economics that depicts the correlation between overall consumption and the gross national income.