Government regulations have little effect on the strategic decision of a business

Assume that an individual has to choose between two options: buying a mobile phone, or buying an iPod. The expected cost of buying a phone is $700 and the expected benefit is $900

The expected cost of buying an iPod is $300, and the expected benefit is $600. How does the individual arrive at the optimal choice if he implements: a) optimization in levels? b) optimization in differences?

Managers at Concord Construction have determined that the firm’s revenues do not cover the firm’s average variable costs. Which term describes the situation at Concord Construction?

a. The shutdown point b. Allocative inefficiency c. Diseconomies of scale d. The price taking point