Why Does Household Production Still Exist

question 39

Multiple Choice

Why does household production still exist?  

• A) because for some households the opportunity cost of production at home is greater than the cost of purchasing the good in the market 
• B) because for some households the opportunity cost of production at home is less than the cost of purchasing the good in the market 
• C) because for some households the value of home production exceeds the sunk cost of home production 
• D) because for some households the value of home production is less than the variable cost of home production

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent and salaries.

Variable Costs

Expenses that fluctuate directly with changes in production or service levels.

Service Department Costs

Expenses incurred by departments that do not directly produce goods but provide essential support services within a company.

Performance Evaluation

The systematic assessment of an employee's work performance using predetermined criteria to improve and manage performance.