A business owner must decide to build sofas, chairs, or bed mattresses with the materials the company owns. The workers at the factory can build 100 sofas, 150 bed mattresses, or 200 chairs. The cost of manufacturing the sofas is more than chairs but less than the cost of manufacturing the mattresses. The profit margin on the mattresses is potentially highest. However, the mattresses require the most time to make. To make the chairs cost the least but uses the most resources. Taking all of these factors into consideration, the owner has to decide which type of furniture to manufacture. Based on the scenario, the business owner needs to mainly determine which of these? The scarcity of resources for each option The value of manufacturing each option The sales taxes for manufacturing each option The maximum utility from each option
A business owner must decide to build sofas, chairs, or bed mattresses with the materials the company owns. The workers at the factory can build 100 sofas, 150 bed mattresses, or 200 chairs. The cost of manufacturing the sofas is more than chairs but less than the cost of manufacturing the mattresses. The profit margin on the mattresses is potentially highest. However, the mattresses require the most time to make. To make the chairs cost the least but uses the most resources. Taking all of these factors into consideration, the owner has to decide which type of furniture to manufacture. Based on the scenario, the business owner needs to mainly determine which of these? The scarcity of resources for each option The value of manufacturing each option The sales taxes for manufacturing each option The maximum utility from each option
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A business owner must decide to build sofas, chairs, or bed mattresses with the materials the company owns. The workers at the factory can build 100 sofas, 150 bed mattresses, or 200 chairs. The cost of manufacturing the sofas is more than chairs but less than the cost of manufacturing the mattresses. The profit margin on the mattresses is potentially highest. However, the mattresses require the most time to make. To make the chairs cost the least but uses the most resources. Taking all of these factors into consideration, the owner has to decide which type of furniture to manufacture.
Based on the scenario, the business owner needs to mainly determine which of these?
- The scarcity of resources for each option
- The value of manufacturing each option
- The sales taxes for manufacturing each option
- The maximum utility from each option
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