Exam 2: Benefits, Costs, and Decisions

​People tend to eat more at all you can eat buffets than they would at any other restaurants.This is so because the cost of consuming an additional item at an all you can eat buffet is

​Scott used $4,000,000 from his savings account that paid an annual interest of 5% to purchase a hardware store.After one year,Scott sold the business for $4,100,000.His economic profits is:

Fast Food Terminals II Taco Casa is considering installing touch screen terminals for patrons to place their food orders.A terminal can typically accommodate the placement of 15 orders each hour while a human can process 20 orders each hour.If employee costs are $7.50/hour in wages and $4.50/hour in taxes,benefits and insurance,what is the per order opportunity cost of a touch screen?

​A business incurs the following costs per unit: Labor $5/unit;Materials $3/unit and rent $5000/month.If the firm produces 1000 units a month,the total variable costs equals

​You go to see a movie that you believe would turn out to be amazing.The ticket costs you $20.Once in the theatre you realize that the movie is awful.If you leave now,you can still catch your favorite TV show.What should you do?

Sarah can bake 200 cookies in an hour or watch her favorite tv show.If she chooses to watch her show,her opportunity cost is

​Fast Food Terminals Taco Casa is considering installing touch screen terminals for patrons to place their food orders.They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals.What are the marginal costs of installing another terminal at a location?

​James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store.After one year,James sold the business for $320,000. What is his economic profit?

​A business incurs the following costs per unit: Labor $5/unit;Materials $3/unit and rent $5000/month.If the firm produces 1000 units a month,the total fixed costs equals

You are at an all-you-can-eat-buffet.You feel almost full.However they just brought out your favorite dessert and you can either choose to eat that or a helping of tapioca pudding.If you choose the cupcakes,the pudding would be your

​Wealthy professors are more likely to shop at high end stores with shorter wait times at the cashier than poor students because

​A business incurs the following costs per unit: Labor $125/unit;Materials $45/unit and rent $250,000/month.If the firm produces 1,000,000 units a month,the total costs equal

​A hidden cost fallacy can be avoided

​James used $200,000 from his savings account that paid an annual interest of 10% to purchase a hardware store.After one year,James sold the business for 300,000. His economic profit is:

​Scott used $4,000,000 from his savings account that paid an annual interest of 5% to purchase a hardware store.After one year,Scott sold the business for $4,100,000. His accounting profits is:

​A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85.Later,a manager has an opportunity to outsource production to another company at a cost per unit of $1.75.If you are the manager,you

​Fixed costs are

​After graduating from college,Jim had two choices.He can either move to Florida,from Philadelphia,where he can work as an analyst and earn $60,000 or he can stay in Philadelphia and work in a car dealership earning $59,000.His opportunity cost of moving to Florida includes

​When a firm ignores the opportunity cost of capital when making investment or shutdown decisions,this is a case of

​Stuck in Cleveland You purchased a roundtrip ticket to a friend's wedding in Cleveland on Saturday for $400,but on Sunday you discover your return flight is canceled due to weather.The airline will not be able to get you back home until late Monday but Greyhound has an overnight bus route that arrives at 6:00am Monday for $60.What is the opportunity cost of missing work on Monday?