Within the Relevant Range of Activity Fixed Cost Per Unit

question 51

Multiple Choice

Within the relevant range of activity fixed cost per unit will tend to:

• A) vary directly and proportionately with the level of activity.
• B) vary inversely with the level of activity.
• C) exhibit erratic movements.
• D) remain constant.

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource, such as labor or capital, holding all other inputs constant.

Wage Rate

The amount of compensation paid to an employee per unit of time, often hourly or annually, reflecting the price of labor in a market.

Labor

The effort by humans to produce goods or services in exchange for wages or other forms of compensation.

Total-Product Schedule

A table showing the output or total product resulting from various quantities of inputs or resources, used in production theory.