The following terms are used to describe various economic characteristics of costs.a. Opportunity costb. Out-of-pocket costc. Sunk costd. Differential coste. Marginal costf. Average costRequired: Choose one of the terms listed above to characterize each of the amounts described below.1. The cost of feeding 500 children in a public school cafeteria is $800 per day, or $1.60 per child per day. What economic term describes this $1.60 cost?2. The cost of including one extra child in a day-care center.3. The cost of merchandise inventory purchased two years ago, which is now obsolete.4. The management of a high-rise office building uses 2,500 square feet of space in the building for its own management functions. This space could be rented for $250,000. What economic term describes this $250,000 in lost rental revenue?5. The cost of building an automated assembly line in a factory is $800,000. The cost of building a manually operated assembly line is $375,000. What economic term is used to describe the difference between these two amounts?6. Referring to the preceding question, what economic term is used to describe the $800,000 cost of building the automated assembly line?7. The cost incurred by a computer manufacturer to produce one more unit in its most popular line of laptop computers.
The following terms are used to describe various economic characteristics of costs.
a. Opportunity cost
b. Out-of-pocket cost
c. Sunk cost
d. Differential cost
e. Marginal cost
f. Average cost
Required: Choose one of the terms listed above to characterize each of the amounts described below.
1. The cost of feeding 500 children in a public school cafeteria is $800 per day, or $1.60 per child per day. What economic term describes this $1.60 cost?
2. The cost of including one extra child in a day-care center.
3. The cost of merchandise inventory purchased two years ago, which is now obsolete.
4. The management of a high-rise office building uses 2,500 square feet of space in the building for its own management functions. This space could be rented for $250,000. What economic term describes this $250,000 in lost rental revenue?
5. The cost of building an automated assembly line in a factory is $800,000. The cost of building a manually operated assembly line is $375,000. What economic term is used to describe the difference between these two amounts?
6. Referring to the preceding question, what economic term is used to describe the $800,000 cost of building the automated assembly line?
7. The cost incurred by a computer manufacturer to produce one more unit in its most popular line of laptop computers.
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