Economics · Level 1 · 184 words

Why the Big Box Costs Less

Original passage © Studio AM, written for Fluency.

Two boxes of the same rice sit on the shelf. The small one holds one kilogram and costs three dollars. The large one holds five kilograms and costs twelve dollars. The large box has a bigger number on the price tag, yet it is the cheaper rice. One kilogram costs three dollars in the small box and two dollars and forty cents in the large one.

The reason is that some costs do not grow with size. The box itself, the printing, the label, the space on the truck, the moment a worker spends handling it: these change very little between one kilogram and five. Spread the same fixed cost over more rice and the cost of each kilogram falls.

This is why shops print a price per kilogram in small letters under the tag. It is the only number that lets you compare. But a lower unit price is a saving only if you use it all. Buy five kilograms, eat one, and throw four away, and you paid twelve dollars for one kilogram. That is the most expensive rice in the shop.

Comprehension questions

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4 questions
1. According to the passage, what does one kilogram cost in the large box?

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A. Two dollars and forty cents.
The first paragraph gives both numbers: three dollars per kilogram in the small box and two dollars and forty cents in the large one.

2. The passage suggests that a shopper who buys the large box and wastes most of it

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D. has actually paid the highest price of all
The last two sentences say that buying five kilograms and using one means paying twelve dollars for one kilogram, which the writer calls the most expensive rice in the shop.

3. What is the main idea of the passage?

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C. Large boxes cost less per unit because fixed costs are shared, but only if you use it all.
The passage explains why the unit price falls (fixed costs spread over more product) and then adds the condition in the last paragraph. Both halves are needed.

4. In this passage, a "fixed cost" is a cost that

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B. stays about the same no matter how much is in the box
The second paragraph lists box, printing, label, truck space, and handling as costs that "change very little between one kilogram and five." That is what makes them fixed.

Source: Written for Fluency. Original passage © Studio AM, written for Fluency.