Of the Three Major Categories of Consumption,________ Is the Most

question 30

Multiple Choice

Of the three major categories of consumption,________ is the most volatile because their purchase ________.

• A)services;is sensitive to income levels
• B)nondurables;is sensitive to income levels
• C)durables;can be postponed when incomes decline
• D)durables;they are necessities

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Definitions:

Allocation of Limited Resources

The process of distributing scarce resources among various projects or business units.

Incremental Costs

The additional costs incurred when producing an additional unit of a product or service.

Fixed Manufacturing Costs

Costs that do not change with the level of production, such as rent, salaries, and insurance, which are incurred regardless of output volume.

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service.