Exploring Fixed, Variable, and Marginal Costs in Economics

What type of business does Joe operate?

• Web design

• Retail

• Restaurant

• Consulting

What is an example of a fixed cost in Joe's business?

• Overtime pay

• Office rent

• Electricity bill

• None of the above

What remains constant regardless of business activity?

• Overtime payments

• Fixed salaries

• Utilities

• None of the above

Which cost varies with the number of orders in Joe's business?

• Utilities

• Salaries

• Software licenses

• Rent

What would be considered a variable cost in Joe's business?

• Employee salaries

• Office rent

• Electricity usage

• Software licenses

What would happen to employee costs if Joe paid per hour?

• They would be variable

• They would double

• They would be fixed

• They would disappear

What is the marginal cost primarily affected by during a busy month?

• Fixed salaries

• Software fees

• Overtime pay

• Rent costs

How does Joe calculate his total business costs?

• Fixed costs only

• None of the above

• Variable costs only

• Sum of fixed and variable costs

What is the effect of having no overtime on the marginal cost?

• Becomes zero

• Increases significantly

• Remains low

• Decreases slightly