A Step Fixed-Cost Function

question 172

Multiple Choice

A step fixed-cost function:

• A)is fixed over the short run but not over the long run
• B)is often approximated with a continuous variable-cost function
• C)remains the same over a narrow range of activity
• D)example includes setup costs

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Definitions:

Consumption

Utilization of products and services by household members.

Present Value

The contemporary estimate of a future monetary sum or cash flows, evaluated with a given return rate.

Investment Projects

Initiatives or plans undertaken by individuals or organizations to allocate resources with the expectation of generating future profits.

Budget Set

The collection of all possible bundles of goods and services that a consumer can afford given their income and the prices of goods.