A Man Moves from a Large City to a Small

question 37

Multiple Choice

A man moves from a large city to a small town.In the small town he seems like a very different person than the person he was in the big city.For instance,he is more polite in the small town than he was in the big city.This could be because

• A) the costs of his being impolite are higher in the big city than in the small town.
• B) the costs of his being impolite are higher in the small town than in the big city.
• C) he is a happier person in the small town and it could be that happier people are more polite.
• D) b and c
• E) a and c

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Definitions:

Break-Even Sales

The amount of revenue from sales needed to cover all fixed and variable expenses, at which point a business neither profits nor loses money.

Contribution Margin Ratio

A financial metric indicating the portion of sales revenue that is not consumed by variable costs, represented as a percentage of total sales.

Monthly Fixed Expense

Regular, unchanging expenses that occur on a monthly basis, such as rent or salaries, regardless of business activity levels.

Target Profit

The amount of net income a company aims to achieve for a specified period as part of its financial and operational goals.