Answers 2102320-Economics HONORS - Edgenuity TeacherCase Study: Starting a Business

Case Study: Starting a Business Answers

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The graph shows the average household income for a community named Anytown. Anytown households that earn more than $75,000 tend to buy sports equipment, while households that earn less than $75,000 tend to buy TVs. Which new business would be most likely to succeed?

a car dealership

an electronics store

an office supply store

a sporting goods store

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The graph shows a production possibilities curve for Sabrina’s Soccer. At which point on the graph are resources not used efficiently?

point A

point F

point X

point Y

A survey of hobbies and purchases can help a producer

assess demand to choose a business.

identify the marginal benefit to make a profit.

decide the production costs to make a good.

determine the remaining supply to lower costs.

Read the factors of production for two businesses: In Case manufactures cases for smart phones, while Wrap It Up is a gift-wrapping service. In Case• $1,500 a month for rented building• Will need two new employees• $2,000 for inventory expenses• $4,500 for equipment expenses Wrap It Up • $1,500 a month for a rented store• Will need five new employees• $1,500 for inventory expenses• $2,500 for equipment expensesWhich statement correctly compares the two businesses?

In Case will require a less costly investment in labor, while Wrap It Up will require less capital in the long term.

In Case will require less capital in the long term, while Wrap It Up will require a less costly investment in labor.

In Case will require a more costly investment in land, while Wrap It Up will have higher inventory costs.

In Case will have higher inventory costs, while Wrap It Up will require a more costly investment in land.

The chart shows a production possibilities schedule for Sabrina’s Soccer. If the market for soccer balls is saturated and the market for soccer nets is open, which combination makes the most sense for Sabrina’s Soccer?

Which action wouldmostlikely help a producer maximize profit?

Keeping marginal revenue below marginal cost

Producing goods regardless of production cost

Monitoring the cost and revenue of additional units

Lowering prices until profit disappears

What is the difference between absolute advantage and comparative advantage?

Absolute advantage is the ability to produce a good or a service at a lower production cost than competitors. Comparative advantage is the ability to produce a good or service at a lower opportunity cost than competitors.

Absolute advantage is the ability to produce a good or a service at a lower opportunity cost than competitors. Comparative advantage is the ability to produce a good or service at a lower production cost than competitors.

Absolute advantage is the ability to sell a good or a service at a lower price than competitors. Comparative advantage is the ability to sell a good or service at a higher price than competitors.

Absolute advantage is the ability to sell a good or a service at a higher price than competitors. Comparative advantage is the ability to sell a good or service at a lower price than competitors.

Read the results from a survey of consumers in Anytown. • Fourteen percent of participants desire a store that offers custom-made shoes.• Thirteen percent of participants plan to purchase a new phone in the next year.• Fifty-two percent of participants think an additional pizza place is needed.• Twenty-one percent of participants say they purchase bagels on a daily basis. Based on the survey data, what will occur if a new pizza place opens?

It will result in excess supply.

It will result in excess demand.

It will help to reduce the supply.

It will help to satisfy the demand.

The graph shows a production possibilities curve for Sabrina’s Soccer. At which two points will Sabrina’s Soccer produce the most equal amounts of soccer balls and soccer nets?

points A and B

points C and D

points E and F

points X and Y

The graph shows the marginal cost of producing soccer cleats for Sabrina’s Soccer. At which level of production does the company make the least profit?

the first pair of cleats

the second pair of cleats

the third pair of cleats

the fourth pair of cleats

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