Question

Activity

Part A
Match the factors affecting cost to their definitions. Write the name of the factor next to its definition

Answer 1

cost of materials: the value of all things needed to create the good or service

opportunity cost: the value of a product given up to produce or obtain another product

fixed cost: costs that are not affected by the level of production

sunk cost: past costs that cannot be recovered

marginal cost: change in total cost that arises when the quantity produced changes by one unit

Answer 2

cost of materials - the value of all things needed to create the good or service

opportunity cost - the value of a product given up to produce or obtain another product

fixed cost - costs that are not affected by the level of production

sunk cost - past costs that cannot be recovered

marginal cost - change in total cost that arises when the quantity produced changes by one unit

Explanation: