If Total Costs Remain the Same, the Smaller the Proportion

question 28

Multiple Choice

If total costs remain the same, the smaller the proportion of fixed costs in a firm's cost structure

• A) the greater the impact on profit from a percentage change in sales volume.
• B) the smaller the impact a percentage change in sales volume will have on profit.
• C) the lower the contribution margin.
• D) the smaller the impact a percentage change in sales volume will have on profit AND the lower the contribution margin.

Understand the concept of counterfactual thinking and its impact on emotions and decisions.

Recognize the effects of cognitive biases like the false consensus and false uniqueness effects on social perception.

Identify and explain different types of cognitive errors (e.g., the first instinct fallacy, illusion of control).

Explain the significance of theory perseverance and how prior beliefs influence new information processing.

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Definitions:

PATCO Strike

A significant labor strike in 1981 by the Professional Air Traffic Controllers Organization in the United States, which ended with the firing of striking workers by President Reagan.

Adversarial Labor-Management Relations

A relationship between labor unions and management characterized by conflict and opposition, often leading to strikes and labor disputes.

Union Suppression

Strategies or actions taken by employers to discourage unionization or diminish the influence of unions within their organization.

Racism

Prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one's own race is superior.