Owen Runs a Delivery Business and Currently Employs Three Drivers

question 116

Multiple Choice

Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so that all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. It will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day:

• A) is $0 since Owen does not have to purchase another van.
• B) is $5.
• C) is $75.
• D) cannot be calculated without knowing Owen's total fixed costs.

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Definitions:

Loaded Question

A question that contains a controversial or unjustified assumption, making it difficult to answer without bias.

Begging the Question

Begging the question is a logical fallacy where the conclusion of an argument is assumed in one of its premises, essentially arguing in a circle without providing proof.

Independent Premises

Arguments or statements that support a conclusion but do not rely on each other to do so.

Fallacy of Division

This logical fallacy assumes that what is true of a whole must also be true of its parts. For example, assuming that because a car is heavy, each part of the car must also be heavy.