Mitchell Has Worked for a Very Large Company for Three

question 56

Multiple Choice

Mitchell has worked for a very large company for three years.During lunch one day he stood at the elevator and read the building directory.He noticed that all of the accounting staff for his business was grouped on one floor,all of the legal personnel were on the floor above his,the CEO and his staff were on the top floor,the marketing and advertising departments on the floor under his,and the sales department on the floor under marketing and advertising.How is Mitchell's business departmentalized?

• A) This business is departmentalized by function.
• B) This business is departmentalized by location.
• C) This business is departmentalized by customer.
• D) This business is departmentalized by product.

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Definitions:

Opportunity Cost

The expense incurred by not selecting the next most favorable option when deciding or opting for one action instead of another.

Hourly Wage

The amount of money paid to an employee for one hour of work.

Leisure

Time free from work or duties, which can be used for relaxation, hobbies, or cultural activities.

Substitution Effect

The transformation in purchasing decisions resulting from changes in the relative pricing of goods, compelling consumers to replace one good with another.