Stan Buys a 1966 Mustang, Which He Plans to Restore

question 174

Multiple Choice

Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $15,000 and that he can sell it for $19,000. When he has spent $14,000, he discovers he needs to replace the engine, which will cost $5000. He can sell the car without the new engine for $16,000. What should Stan do?

• A) He should complete the repairs and sell the car for $19,000.
• B) He should sell the car now for $16,000.
• C) He should keep the car for his own use because selling it would be a loss.
• D) He should be totally indifferent between finishing the project and selling the car now.

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Definitions:

Management

The process of planning, organizing, leading, and controlling an organization's human, financial, physical, and information resources to achieve organizational goals in an efficient and effective manner.

Monopsonist

A single buyer dominant in a market, capable of influencing prices due to its purchasing power.

Labor Supply Curve

A graphical representation that shows the relationship between the wage rate and the quantity of labor that workers are willing to supply.

Impose

To enforce or apply a rule, tax, penalty, or restriction.