Which of the Following Is an Example of a Variable

question 121

Multiple Choice

Which of the following is an example of a variable cost for Big Bob's cream store?

• A) ice cream freezer
• B) ice cream cones
• C) rent
• D) insurance

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Definitions:

Marginal Output

Refers to the additional output that results from using one more unit of a production input, such as labor or capital, in the production process.

Total Output

The total quantity of goods and services produced in an economy during a given period.

Fixed Cost

Expenses that do not change in total regardless of the level of output or activity, such as rent, salaries, and insurance.

Variable Cost

Expenses that vary directly with the volume of output or business operations.