In the 1950s, Walt Disney Began to Plan the Development

question 118

Multiple Choice

In the 1950s, Walt Disney began to plan the development of a theme park that would eventually become Disneyland. Disney hired an economist to help determine whether the park would be a financial success. This economist surveyed managers of existing amusement parks for advice. Many of these managers

• A) believed that a theme park would be very successful because the Disney name created a market among children and parents who had watched Disney cartoons and movies such as Snow White.
• B) recommended that the theme park be located in California because population in the state would increase greatly in the future. Disney followed this advice.
• C) recommended that Disney not build the park and leave the amusement park business to those who knew what they were doing.
• D) recommended that Disney first build an audience for his park by offering the ABC television network a weekly program that would feature Disney movies, cartoons and original programming. Walt Disney followed this advice. Both the television program and Disneyland were financial successes.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales activities, such as rent, salaries, and insurance premiums.

Mixed Costs

Expenses that have both fixed and variable components, changing in total with the level of activity but not proportionally.

Fixed Costs

Fixed costs, including items like rent, salaries, and insurance, do not vary based on the amount of goods produced or sold.

Variable Costs

Expenditures that shift in direct relation with the amount of output or sales, including raw materials and direct labor costs.