Final answer:
The degree of association between cost and activity output is measured by average cost and marginal cost.
Step-by-step explanation:
The degree of association between cost and activity output is measured by the concepts of average cost and marginal cost. Average cost represents the cost per unit of output, calculated by dividing the total cost by the quantity of output produced. Marginal cost, on the other hand, measures the additional cost incurred by producing one more unit of output.
By analyzing these costs, we can understand the relationship between input and output and make informed economic decisions.