A Package Delivery Service Uses Vans and Employees to Deliver

question 39

Multiple Choice

A package delivery service uses vans and employees to deliver the maximum number of packages given a fixed budget. The last van added 600 packages to total output, while the last employee added 500 packages. If vans cost $400 per week and employees earn $300 per week, the firm

• A) could deliver more packages with the same budget by using more employees and fewer vans.
• B) could deliver more packages with the same budget by using more vans and fewer employees.
• C) should use more vans and fewer employees because the last dollar spent on vans added more to total output than the last dollar spent on employees.
• D) is delivering the maximum number of packages given the fixed budget.
• E) both b and c

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Definitions:

Stockholders' Equity

Represents the residual interest in the assets of a corporation after deducting liabilities, effectively the net worth attributable to shareholders.

Common Stock

Equity securities that represent ownership in a company, entitling holders to vote on corporate matters and receive dividends.