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- Subject
- Introduction To Economicseconomics-mcqs › introduction-to-economics
- Published
- 26 May 2019
- Last updated
- 28 May 2026
You are preparing to operate a hot dog stand at an upcoming fair. Initially, you projected sales revenue of Rs 2000, and you have already invested Rs 1000 in constructing the stand. The stand is almost finished, but due to a scheduling conflict with a major music festival nearby, you now expect total sales to drop to Rs 800. It will cost an additional Rs 300 to complete the stand. According to the decision rule, you should proceed with finishing the stand if the cost of completion is less than what amount?
Multiple choice question for Introduction To Economics. Select an option, then review the explanation below.
Explanation
The decision to complete the hot dog stand should be based on whether the additional cost to finish it is less than the expected revenue from sales. Since the revised expected sales amount to Rs 800, you should only continue if the completion cost is below Rs 800. Past expenses are sunk costs and should not influence this decision.
More Introduction To Economics MCQs
Practice related questions from the same subject.
- 1.Which of the following factors directly influences the supply curve?
- 2.Under what condition is a market considered to be in equilibrium?
- 3.What type of relationship is depicted when a graph shows that as the values on the horizontal axis increase, the values on the vertical axis decrease?
- 4.Which two elements are essential to construct a straight-line graph?
- 5.How can a nominal value be converted into a real value?