Consider the Following Prices from a McDonald's Restaurant: a McDonald's

question 17

Multiple Choice

Consider the following prices from a McDonald's Restaurant: A McDonald's Big Mac value meal consists of a Big Mac sandwich, large Coke, and a large fries. Assume that there is a competitive market for McDonald's food items and that McDonald's sells the Big Mac value meal for $4.59. Does an arbitrage opportunity exists and if so how would you exploit it and how much would you make on one value meal?

• A)Yes, buy a value meal and then sell the Big Mac, Coke, and fries to make arbitrage profit of $0.67.
• B)No, no arbitrage opportunity exists.
• C)Yes, buy a Big Mac, Coke, and fries, then sell a value meal to make arbitrage profit of $1.34.
• D)Yes, buy a Big Mac, Coke, and fries, then sell a value meal to make arbitrage profit of $0.67.

Understand the defining characteristics and purposes of major organizational structures (functional, divisional, matrix, team-based, network).

Identify the benefits and drawbacks of various departmentalization methods.

Recognize the significance of the span of control in organizational design and its relationship with hierarchical structures.

Explain the concept of standardization as a coordinating mechanism and its implications for organizational structure.

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Definitions:

Marginal Tax Rate

The tax rate applied to the next dollar of income, indicating how much tax will be paid on an additional dollar of earnings.

Proportional

Pertaining to a relationship or situation where two quantities vary directly with each other.

Taxable Income

The amount of income that is subject to taxation, after all allowable deductions, credits, and exemptions.

Total Income

The sum of all earnings received by an individual or entity, encompassing wages, salaries, profits, rents, and other forms of earnings.