Multiple Choice
A manager invests $400,000 in a technology to reduce overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.After a year,the manager has an opportunity to outsource production to another company at a cost per unity of $1.75.If you are the manager,you
A) should consider the $400,000 as sunk cost and therefore it should not be relevant to the decision.
B) should base your decision upon economic profit and not accounting profit
C) should avoid the fixed-cost fallacy
D) all the above
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Total costs equal<br>A)Fixed costs<br>B)Variable costs<br>C)Sunk costs<br>D)Fixed plus
Q2: A business incurs the following costs per
Q2: In the long-run,all costs are<br>A)Fixed costs<br>B)Variable costs<br>C)Sunk
Q3: Variable costs are<br>A)costs that vary with output<br>B)equal
Q5: Susan can bake 200 cookies in an
Q6: All of the following are examples of
Q7: Economists argue that:<br>A)accounting costs consider all types
Q9: Economic Value Added helps firms to avoid
Q10: If a firm is earning negative economic
Q65: A business incurs the following costs per