Westerlund Owns a Picture-Framing Shop,The Caplow Co

question 18

Multiple Choice

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 costs for a typical framed picture,which consists of $5 for glass,$2 for matting,$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.Westerlund is considering buying an automatic matte-cutting machine in order to reduce the number of hours of direct labor required to produce a framed picture.In considering this purchase,she should recognize this purchase will __________ Caplow's variable cost and __________ Caplow's fixed cost.

• A) decrease; increase
• B) decrease; decrease
• C) increase; decrease
• D) increase; increase
• E) have no effect on; have no effect on

---

Definitions:

Satyagraha Movement

A movement based on nonviolent resistance, initiated by Mahatma Gandhi to challenge British rule in India and promote social change.

Nonviolent Resistance

A strategy for social change that employs peaceful methods, as opposed to violence, to bring about political or social change.

Revolutions

Significant changes that drastically alter the social, political, or economic order, often resulting from collective action or conflict.

Colonialism

The practice of acquiring full or partial political control over another country, occupying it with settlers, and exploiting it economically.