When a Retailer Responds to an Economic Downturn by Putting

question 105

Multiple Choice

When a retailer responds to an economic downturn by putting a freeze on salaries, laying off sales associates, and hiring more part-time workers, the employees tend to respond with:

• A) lower job turnover
• B) increased motivation and effort
• C) poor customer service
• D) higher levels of job satisfaction
• E) all of these

Differentiate between fixed, variable, and mixed costs in practical scenarios.

Understand and apply the concept of the relevant range in management decisions.

Calculate and distinguish between different types of costs using methods like the high-low method.

Conceptualize the impact of cost behavior on decision-making in production and cost management.

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Definitions:

Utility Maximizing

The economic principle where individuals or entities make choices to get the highest level of satisfaction from their resources.

Market Basket

A collection of goods and services used to track inflation, consumer spending, or the cost of living in an economy.

MRSxy

The Marginal Rate of Substitution between good x and good y, indicating the rate at which a consumer is willing to give up good y for an additional unit of good x, keeping utility constant.

Purchasing Power

The real value of money, defining how much goods or services a unit of currency can buy, often influenced by inflation.