Refer to Scenario 9

question 145

Multiple Choice

Refer to Scenario 9.10 below to answer the question(s) that follow.
SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly) . Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.
-Refer to Scenario 9.10. The cafe's economic profit is

Definitions:

Effortful Thinking

The process of engaging in mental activities that require significant cognitive resources, as opposed to automatic or effortless thinking.

Problem Solving

The process of finding solutions to difficult or complex issues.

Intolerance for Ambiguity

A personality trait that describes individuals who struggle with uncertain, unclear, or unpredictable situations.

Need for Cognition

A psychological term referring to an individual's tendency to engage in and enjoy thinking, analysis, and problem-solving.