For February,the Cost Components of a Picture Frame Include $0

question 129

Multiple Choice

For February,the cost components of a picture frame include $0.30 for the glass,$0.75 for the wooden frame,and $0.80 for assembly.The assembly desk and tools cost $500.Two hundred fifty frames are expected to be produced in the coming year.What cost function best represents these costs?

• A) y = 1.85 + 500X
• B) y = 500 + 1.85X
• C) y = 3.85 + 600X
• D) y = 1.05 + 500X

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Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Allocated Efficiently

Refers to the optimal distribution of resources and goods in a way that maximizes the welfare or utility of consumers.

External Costs

Expenses that a business or economic activity imposes on unrelated third parties or the environment, which are not reflected in market prices.

External Benefits

External Benefits are positive effects of a production or consumption activity on third parties who did not directly participate in the economic transaction.