Suppose That Your Public Library Charges a Fixed Monthly Membership

question 283

Multiple Choice

Suppose that your public library charges a fixed monthly membership fee of $12.Members are allowed to check out as many books as they want under this plan.The average member checks out 4 books per month.Suppose that your public library changes its policy.Now each book costs $3 to check out but there is no longer a monthly membership fee.What effect do you think the new policy will have on the total number of books checked out from your library each month? The new policy is likely to ______the number of booked checked out because ________.

• A) leave unchanged; members have already shown that they are willing to pay $12 to check out 4 books per month
• B) leave unchanged; the average cost of the library service is the same under both plans
• C) reduce; the marginal benefit of checking out books is now lower under the new policy
• D) reduce; the marginal cost of checking out books is now higher under the new policy
• E) increase; the average benefit of checking out more than 4 books is now higher under the new policy

Understand the principles of negligence, including duty of care, breach of duty, causation, and damages.

Identify the elements required to establish a negligence claim.

Recognize how the concept of proximate cause applies to negligence cases and its implications for liability.

Understand the legal significance of statutory violations (negligence per se) in negligence claims.

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Definitions:

Direct Labor Variance

The discrepancy between the expected (budgeted) cost of direct labor and the actual cost incurred during a production period.

Direct Labor Time Variance

The difference between the estimated time to produce a good and the actual time taken, often used in cost accounting.

Actual Costs

Actual costs are the expenses that a company incurs for producing goods or services, including materials, labor, and overhead, as opposed to estimated or budgeted costs.

Standard Costs

The predetermined costs of manufacturing a product or providing a service, used as benchmarks against actual costs.