Scenario: a Firm Wants to Set Up a Factory

question 19

Multiple Choice

Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour.

-Refer to the scenario above.What is the marginal opportunity cost of transporting products to the market if the firm chooses factory Far over factory Very Far?

• A) −$50
• B) −$100
• C) $50
• D) $150

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Definitions:

Horizontal Syncline

A geological fold that is concave up and has its layers oriented horizontally, often indicating a region of compression where rock layers have been bent downward.

Empowerment

The process of enabling or authorizing individuals to think, behave, take action, and control work and decision-making in autonomous ways.

Authoritarian Style

A leadership or parenting style characterized by strict discipline, high demands, and little flexibility.

Individual Initiative

The proactive and self-driven decision-making and actions by an individual to effect change or achieve goals without direct supervision or instruction.