For a Fixed Cost, as Volume Increases

question 11

Multiple Choice

For a fixed cost, as volume increases:

• A) the cost behaviour depends on the type of fixed cost involved.
• B) total fixed costs remain constant and fixed costs per unit increase.
• C) both total fixed costs and fixed costs per unit remain constant.
• D) total fixed costs remain constant and fixed costs per unit decrease.

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Definitions:

Capacity Utilization Rate

A measure of how well an economy or a firm is using its productive capacity to manufacture goods or services.

Unemployment Rate

A gauge of the share of individuals in the labor pool who are not employed but are actively seeking a job.

Economy Operated

Refers to the manner in which a nation’s economic systems and policies are managed and function to produce goods and services.

Percent Unemployment

The slice of the labor force that remains without work but is actively engaging in job search.