An Economics Professor, Upset About the Rising Cost of Textbooks

question 129

Multiple Choice

An economics professor, upset about the rising cost of textbooks, proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use. Which of the following strategies would not prevent a common resource problem with the textbooks?

• A)Students will be required to pay a deposit for the textbook, which is refundable at the end of the semester when the book is returned in good condition.
• B)The textbooks are placed in a common area of the department so students can borrow and return them as needed.
• C)Students must sign a form agreeing to return the book or pay a fine equal to the replacement cost of the book.
• D)The textbooks are placed in the professor's office and will only be given to students who are registered members of the class. These students will not receive their final course grades until the books are returned.

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Definitions:

Cost Structure

The composition of a company's costs, including fixed and variable costs.

Equipment Depreciation

The allocation of the cost of physical assets over their useful lives, recognizing the reduction in value due to wear and tear, obsolescence, or age.

Material Costs

Expenses associated with the raw materials and components required for manufacturing goods.

Portfolio Analysis

The process of evaluating the performance of an investment portfolio to meet specific financial objectives, often by assessing risk versus return.