Pookie's Pinball Palace restores old Pinball machines. Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration. After having spent $300, Pookie discovers that he
will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration. Alternatively, he can sell the machine "as is" now for $1,000. What should he do?
A) He should sell the machine now to make the most profit.
B) It does not matter what he does; he is going to take a loss on his project.
C) He should rewire the machine, complete the task and then sell the machine.
D) He should have never purchased the machine because he has already spent too much time on it and has not been paid for that time.
Answer: A
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Which best expresses the law of diminishing marginal utility?
A. The more a product is consumed, the greater the total utility received from the product. B. The less a product is consumed, the smaller the marginal utility received from the product. C. The more a product is consumed, the smaller the total utility received from the product. D. The more a product is consumed, the smaller the marginal utility received from the product.
Human capital theory suggests that everyone's income reflects individual choices about investments in education and training
Indicate whether the statement is true or false
Refer to the above figure. How do you describe what is happening as the economy moves from point A to point B?
A. The technology for growing wheat has improved. B. Land that was once used to grow wheat is now being used to graze sheep. C. The economy has acquired new resources that are well suited for producing wool. D. The economy is producing more bread by choosing to produce less wool.
The J-curve effect that results from currency depreciation results is due to
A) the initial effect having positive effects on the current account balance. B) the value of imports increasing by more than the value of exports at the time of devaluation. C) exports and imports being totally unresponsive to changes in exchange rates. D) decreases in the dollar price of imports.