The Total-Cost Approach and the Incremental-Cost Approach to Evaluating Two

question 133

Multiple Choice

The total-cost approach and the incremental-cost approach to evaluating two competing investment opportunities:

• A) are dissimilar in that one deals with net present value and the other deals with internal rate of return.
• B) are similar in that they will recommend the same alternative as the best.
• C) are dissimilar in that one uses the cost of capital as a discount rate and the other does not.
• D) are similar in that neither considers the time value of money.

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Definitions:

Craft Union

A labor union representing workers who are skilled in a particular craft, dedicated to protecting the workers' interests and negotiating for better terms through collective bargaining.

Labor Supply Curve

This represents the relationship between the amount of labor that workers are willing to offer and the wage rate, typically showing that higher wages incentivize more labor supply.

Inclusive Unionism

The policy, pursued by industrial unions, in which a union attempts to include every worker in a given industry so as to be able to restrict the entire industry’s labor supply and thereby raise wages. Compare with exclusive unionism.

Industrial Unions

Labor unions that organize workers across a wide range of occupations within a single industry.