A COLA Automatically Raises the Wage When

question 100

Multiple Choice

A COLA automatically raises the wage when

• A)GDP increases.
• B)taxes increase.
• C)the consumer price index increases.
• D)the producer price index increases.

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Definitions:

Fixed Cost

Costs that do not change with the level of production or sales, such as rent or salaries.

Marginal Costs

The cost incurred by producing one additional unit of a product or service.

Total Variable Cost

The sum of all costs that vary with the level of output in the short run.

Average Fixed Costs

The fixed costs of production (expenses that do not change with the level of output) divided by the quantity of output produced.