If you are looking at costs of inputs that change with the amount of output that is produced, are these costs fixed or variable?
Explanation
Answer - B - Variable costs are costs of inputs that change with the amount of output that is produced.
Key Takeaway: When thinking of short run costs, there are generally two types of costs that economists look at: fixed and variable costs. Fixed costs are the costs of inputs that cannot and will not change in the short run, like bill payments, rent, etc. Variable costs are costs that change depending upon the amount of output that is produced. For example, the cost of producing books changes upon the print run (10,000 copies vs. 100,000 copies).
