A Semivariable Cost

question 88

Multiple Choice

A semivariable cost:

• A)Increases and decreases directly and proportionately with changes in volume.
• B)Changes in response to a change in volume,but not proportionately.
• C)Increases if volume increases,but remains constant if volume decreases.
• D)Changes inversely in response to a change in volume.

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Definitions:

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that initiated the change, representing how spending circulates through an economy.

Marginal Propensity

The portion of additional income that an individual is likely to spend on goods and services instead of saving.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, which can affect purchasing power and inflation.

Aggregate Expenditure Line

A graphical representation of the total spending in an economy, including consumption, investment, government, and net exports, at various levels of income.