The Production and Operations Manager at a Large Shoe Factory

question 112

Multiple Choice

The production and operations manager at a large shoe factory in Fall River, Massachusetts, notices that the total number of hours worked by production employees has increased 12 percent, while the number of pairs of shoes ready for shipping has dropped 6 percent this year over last year. This means

• A) the inflation rate is unchanged.
• B) the demand for shoes is decreasing.
• C) the manager's calculations cannot be correct.
• D) productivity has decreased.
• E) the gross national product has increased by 6 percent.

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Definitions:

Monopolistically Competitive

A market structure characterized by many firms selling products that are substitutes but differentiated from one another.

Economic Profit

A firm's total revenues minus its explicit and implicit costs; a measure of performance that includes opportunity costs.

Efficient Level

The optimal point of production or operation where a firm, market, or economy can achieve the best possible outcome with the least waste of resources.

Society's Point

A perspective or consideration based on the collective interests or well-being of a community or society as a whole.