Exam 2: Benefits, Costs, and Decisions

Theater Upgrades BMC is considering upgrading the sound systems in their theaters so that they can patrons can get the full experience from surround sound movies.They discovered that upgrade costs at locations with 12 screens were $170,000 but were $110,000 at locations with six screens.What are the fixed costs of upgrading at a location?

​Jim is planning on attending a football game.He spent $40 on the ticket.He will have to take the day off losing 8 hours of work.His hourly wage is $10.He estimates it will cost him around $20 for gas and parking at the game.Jim's total economic cost of attending the game equals

​Accountants and Economists differ in their calculations of profits in that;

​The hidden-cost fallacy occurs when

​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 costs equals

​Variable costs are

​A car dealership union negotiates a contract that dramatically increases all salesmen's salaries.If one of the salesman is thinking of changing careers to be a hardware salesman,his opportunity cost