Jane Westerlund Owns a Picture-Framing Shop, the Caplow Co

question 238

Multiple Choice

Jane Westerlund owns a picture-framing shop, The Caplow Co. The average price she receives for a picture she frames for a customer is $120. This price must cover her average costs for a typical framed picture of $5 for glass, $2 for matting, and $13 for the frame, and $30 for the labour involved. She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for her salary. Assuming everything else stays the same, if Westerlund wants to increase her monthly salary to $4,000, this would cause the slope of the total cost curve to ________ and the break-even quantity to _________.

• A)increase; increase
• B)decrease; stay the same
• C)stay the same; increase
• D)decrease; increase

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Definitions:

Undisclosed Principal

A situation in a business transaction where the identity of the principal (the person for whom the agent acts) is not revealed to the third party involved in the deal.

Actual Authority

The explicit power granted to an agent by a principal, allowing the agent to act on the principal's behalf.

Scope

The extent or range of view, work, or activity; the breadth of a project or operation.

Promoter

In a business context, a promoter is an individual or entity involved in organizing and starting a company, raising capital, and taking the necessary steps to establish it.