Suppose That Corn Is the Unit of Account in a Certain

question 3

Multiple Choice

Suppose that corn is the unit of account in a certain economy.If a pair of tennis shoes exchanges for two bushels of corn and a pair of hiking boots exchanges for twelve bushels of corn,then

• A)whether or not a double coincidence of wants exists,all trades have to be made using corn
• B)with one pair of tennis shoes,a person will be able to purchase twelve pairs of hiking boots
• C)with one pair of tennis shoes,a person will be able to purchase six pairs of hiking boots
• D)with twelve pairs of tennis shoes,a person will be able to purchase one pair of hiking boots
• E)with six pairs of tennis shoes,a person will be able to purchase one pair of hiking boots

Differentiate between risk, certainty, and uncertainty in decision scenarios.

Comprehend the roles of programmed and nonprogrammed decisions in organizational contexts.

Note the importance of decision rules in simplifying decision-making processes.

Recognize the personal and psychological factors contributing to decision-making errors, specifically escalation of commitment.

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Definitions:

Fixed Cost

A cost that does not change with the increase or decrease in the amount of goods or services produced, such as rent, salaries, and insurance.

Planning Budget

A financial plan that estimates income, expenses, and resources over a period, often used for guiding management decisions.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Fixed Cost

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance.