Pronto Ltd Manufactures Photo Frames and Photo Albums but 15

question 21

Multiple Choice

Pronto Ltd manufactures photo frames and photo albums but 15 000 units of photo frames could be purchased for $5.00 each. The per-unit costs of production for these frames are: Pronto is considering whether to make or buy the photo frames. The costs that are irrelevant to this decision are:

• A) opportunity costs.
• B) variable costs.
• C) available costs.
• D) fixed costs.

Analyze the causes and effects of the 1937-1938 economic downturn.

Identify the key components of the New Deal.

Recognize the industrial changes that enabled competition among manufacturers.

Know the historical context and impact of the Social Security Act.

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Definitions:

Negative Externalities

Costs suffered by a third party as a result of an economic transaction, which are not reflected in the transaction's market price.

Equilibrium Price

The price in the market where the amount of products available matches the amount of products wanted by consumers.

Deforestation

The clearing or thinning of forests by humans to make the land available for other uses, such as agriculture, logging, or mining, often leading to environmental concerns.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.