When Substituting Computerized Equipment for Direct Labor,a Firm Should Treat

question 84

Multiple Choice

When substituting computerized equipment for direct labor,a firm should treat labor as which of the following?

• A)Fixed (or capacity)costs.
• B)Mixed costs.
• C)Opportunity costs.
• D)Variable costs.

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Definitions:

Spot Exchange Rate

The current exchange rate at which one currency can be immediately exchanged for another currency.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Spot Trade

A financial transaction for the immediate exchange of a commodity or currency at the current market price.

Absolute Purchasing Power Parity

Absolute Purchasing Power Parity is an economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust to equalize the price of identical goods in different countries.