Stan Owns a Software Design Business

question 9

Multiple Choice

Stan owns a software design business.He obtained a bank loan to buy computer equipment for his business.He pays $1,000 per month for interest on the loan.He has 10 employees, each of whom is paid $4,000 per month.Because his business has been successful, next month he will increase employee wages to $5,000.If the revenue from his business remains at its current level, Stan is considering an addition to his office.Which of the following statements regarding Stan's business is false?

• A)The payments Stan makes to his employees are variable costs and explicit costs.
• B)The monthly payment Stan makes for his bank loan is an implicit cost.
• C)The monthly payment Stan makes for his bank loan is a fixed cost.
• D)The addition Stan is considering to make to his office would be an implicit cost.

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Definitions:

Correlated Groups Design

A research design where the samples are related or matched in some manner, rather than being completely independent groups.

Control Series Design

An experimental design that involves comparing data from a series of observations before and after the implementation of some intervention or treatment.

Interrupted Time Series Design

A quasi-experimental design in which observations are made over time both before and after an intervention.

Quasi-experimental Design

An empirical study used to estimate the causal impact of an intervention, lacking random assignment.