The Skulls, a Student Social Organization, Has Two Different Locations

question 23

Multiple Choice

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: $$\begin{array} { l c c } \text { Location } & \text { Annual Fixed } & \text { Variable } \\\hline \text { Alpha Ave. } & \$ 5,000 & \$ 200 \text { per person } \\\text { Beta Blvd. } & \$ 8,000 & \$ 150 \text { perperson }\end{array}$$ What would be total annual costs for either location at the point of indifference?

• A) $13,000
• B) $13,350
• C) $9,000
• D) $17,000
• E) $19,200

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Definitions:

Male Poverty Rate

The proportion of the male population living below the poverty line, measured by the income level considered necessary for basic living standards in a given country or area.

Disparity

The existence of inequalities or differences between groups, regions, or countries, often in terms of economic, social, or health outcomes.

Transitory Income

Income that is temporary or not expected to continue at the same level in future periods, such as one-time bonuses or inheritances.

Permanent Income

A theory suggesting that people's spending choices are better determined by their long-term average income rather than their current income.