Jane Westerlund Owns a Picture-Framing Shop, the Caplow Co

question 167

Multiple Choice

Jane Westerlund owns a picture-framing shop, The Caplow Co.The average price she receives for a picture she frames for a customer is $120.This price must cover her average costs for a typical framed picture of $5 for glass, $2 for matting, and $13 for the frame, and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for her salary.Assuming everything else stays the same, if Westerlund wants to increase her advertising expenses to $1,000, this would cause the slope of the total cost curve to __________ and the break-even quantity to _________.

• A)decrease; stay the same
• B)decrease; increase
• C)increase; increase
• D)stay the same; increase
• E)stay the same; decrease

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Definitions:

Psychic Income

The non-monetary satisfaction or pleasure derived from work or non-work activities, such as personal fulfillment, pride, or happiness.

Environmental Effects

The outcomes or impacts of natural and human activities on the environment, including factors like pollution, ecosystem degradation, and climate change.

GDP Deflator

A benchmark for the cost levels of all newly produced, national, final goods and services within an economy.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all final goods and services produced within a country in a year in constant prices.