Fixed Costs That Do NOT Differ Between Two Alternatives Are

question 95

Multiple Choice

Fixed costs that do NOT differ between two alternatives are:

• A) considered opportunity costs.
• B) irrelevant to the decision.
• C) important only if they represent a material dollar amount.
• D) relevant to the decision.

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Definitions:

Investment

Investment pertains to the allocation of resources, such as capital or time, with the expectation of generating an income or profit.

Services

Economic activities that provide intangible products, such as healthcare, education, and financial services, to consumers.

Durable Goods

Items or products that are expected to last for several years under normal use, such as appliances and vehicles.

Nondurable Goods

Items with a short life span which are consumed or used up quickly, such as food and most consumer packaged goods.