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
a. should consider the $400,000 as a sunk cost, not relevant to the decision
b. should reduce his effort by ignoring any new developments and letting the production run as it is.
c. should ignore the $400,000 fixed cost.
d. Both A & C
d
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The real-nominal principle states that
A) what matters to people is the face value of money or income. B) people respond more to explicit, or real, costs than to implicit costs. C) people respond more to implicit costs than to explicit costs. D) what matters to people is the purchasing power of money or income.
Which of the following represents an example of a major cartel in global markets?
a. The Organization of Wheat and Corn Exporting Countries (OWCEC) b. The Organization of Petroleum Exporting Countries (OPEC) c. The Brotherhood of Scrap Iron Exporting Countries (BSIEC) d. The Amalgamated Association of Alfalfa Producing Countries (AAAPC)