Which of the following statements are true and which are false? Fill in the following table. The greatest potential for cost savings occurs in the operation phase of the life cycle. A related sunk cost will normally affect the prospective cash flows associated with a situation. Goods and services have utility because they have the power to satisfy human wants and needs. A nonrefundable cash outlay (e.g., money spent on a passport) is an example of an opportunity cost. Overhead costs normally include all costs that are not direct costs. Most decisions are based on differences that are perceived to exist among alternatives.

Which of the following statements are true and which are false? Fill in the following table. The greatest potential for cost savings occurs in the operation phase of the life cycle. A related sunk cost will normally affect the prospective cash flows associated with a situation. Goods and services have utility because they have the power to satisfy human wants and needs. A nonrefundable cash outlay (e.g., money spent on a passport) is an example of an opportunity cost. Overhead costs normally include all costs that are not direct costs. Most decisions are based on differences that are perceived to exist among alternatives.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth

Section: Chapter Questions

Problem 17SQ

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Which of the following statements are true and which are false? Fill in the following table. The greatest potential for cost savings occurs in the operation phase of the life cycle. True Optimal volume (demand) occurs when total costs equal total revenues False The demand for necessities is more inelastic than the demand for luxuries A nonrefundable cash outlay (e.g., money spent on a passport) is an example of an opportunity cost. False Overhead costs normally include all costs that are not direct costs Most decisions are based on differences that are perceived to exist among alternatives.
You own the video game Grand Theft Auto V. The opportunity cost of playing this game for the second time a)is zero b)is one-half the cost of the game, as this is the second time you have played it. c)is the value of the alternative use of the time you spend playing the game. d) cannot be calculated.
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Your software company recently instituted a highly regarded training program for newly hired software developers. The benefits of this program include not only the benefits to employees but also the goodwill generated by an increase in your reputation among customers and professional groups. The costs of this training program include all of the labor, space, and consultants necessary. Suppose these benefits and costs are given by B(Q) = 100Q - 2Q2 and C(Q) = 10Q, where Q represents the amount of hours each software developer should spend in training. (Note that MB = 100 - 4Q, MC = 10, and that time can be measured in fractions of one hour.) What level of Q maximizes the net benefits? What level of training is optimal? Why?
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