Variable Costs

question 14

Multiple Choice

Variable costs:

• A)are fixed in total as production levels change.
• B)are fixed per unit and vary in total as productions levels change.
• C)decrease per unit as production volume increases.
• D)vary per unit of output as production levels change.

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Definitions:

Expected Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is expected to fall.

Absolute Purchasing Power Parity

A theory that suggests that the price of goods in different countries should be equal when measured in a common currency.

Exchange Rate

The price of one country's currency in terms of another currency or currencies.

Inflation

The pace at which prices for a wide range of goods and services elevate, depreciating the power to purchase.