MA CH 13

Which of the following is not a step in the short-run decision-making model?

• Defining the problem.
• Identifying alternatives.
• Assessing qualitative factors.
• All of these are steps in the shortrun

Costs that cannot be affected by any future action are called

• differential costs.
• sunk costs.
• inventory costs.
• relevant costs.

Which of the following costs is irrelevant to Sandy’s decision to stay in the apartment or move to the house?

• House rent of $450 per month
• Utilities for the house of $100 per month
• The noise in the apartment house
• The last two months of rent in the apartment

Which of the following is a qualitative factor?

• House rent of $450 per month
• Utilities for the house of $100 per month
• The noise in the apartment house
• The cost of the used furniture

Which of the following statements is false?

• Fixed costs are never relevant.
• Variable costs are never relevant.
• Usually, variable costs are irrelevant
• All of the above.

In a make-or-buy decision,

• the company must choose between expanding or dropping a product line.
• the company must choose between accepting or rejecting a special order
• would consider the price of the externally provided good to be relevant
• None of the above.