Households Receive Income in the Form of All of the Following

question 332

Multiple Choice

Households receive income in the form of all of the following EXCEPT:

• A)wages.
• B)dividends.
• C)interest and rent.
• D)investment spending.

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Definitions:

Variable Cost

A cost that changes in proportion to the level of production or business activity.

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs after variable costs have been paid.

Fixed Costs

Costs that do not vary with production level, such as rent, insurance, and salaries of administrative staff.

Variable Costs

Expenses that change directly and proportionally with the level of production or sales volume, such as raw materials and direct labor.