Minnie & Mickey Mouse are opening a cookie shop. They must purchase an oven for their business. What type of cost is the purchase of the oven?

Question

Minnie & Mickey Mouse are opening a cookie shop. They must purchase an oven for their business. What type of cost is the purchase of the oven?

A. A variable cost
B. A fixed cost
C. An opportunity cost
D. A dependent cost

Answer 1

B. A fixed cost

Answer 2

Which statement describes one advantage of a market economy?

A. Nonproductive resources are rewarded.
B. The government owns the productive resources.
C. A high degree of individual freedom is offered.
D. A large bureaucracy is required to make economic decisions.

Answer 3

C. A high degree of individual freedom is offered.

Answer 4

The purchase of an oven for their cookie shop would be considered a B. A fixed cost. Fixed costs are expenses that do not change regardless of the level of production or sales. In this case, the cost of the oven remains the same regardless of the number of cookies they produce or sell.