Which of the Following Costs Change in Total in Direct

question 25

Multiple Choice

Which of the following costs change in total in direct proportion to a change in volume?

• A) fixed costs
• B) variable costs
• C) mixed costs
• D) period costs

---

Definitions:

Utility Function

A numerical model that explains how a consumer gains pleasure or usefulness from using goods and services.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility level constant.

Income Effect

The alteration in the income of a person or the economy, and its effect on the amount of a product or service that is requested.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, causing consumers to substitute away from more expensive goods towards cheaper ones.