Which of the following is a sunk cost for an ice cream shop? A) ice cream ingredients B) ice...
Question:
Which of the following is a sunk cost for an ice cream shop?
A) ice cream ingredients
B) ice cream cones
C) melted ice cream
D) an ice cream scoop
Sunk Costs:
In the production process, a firm incurs several costs, some which are projected and others which are not. A sunk cost in economics and finance is a cost that has already incurred but cannot be recovered. Thus, sunk costs are those costs that are irretrievable when the firm leaves the industry. Normally, when making economic decisions, sunk costs are not taken into account.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe correct answer is: C) melted ice cream
For an ice cream store, melted ice is one of the costs incurred by the shop and which is irretrievable....
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Sunk Costs: Definition & Examples
from
Chapter 31 / Lesson 8
73K
Understand the sunk cost definition. Learn the meaning of sunk cost and sunk cost trap with the help of the sunk cost examples and sunk cost fallacy examples.
Related to this Question
- At Nice Price for the Ice, an ice cream parlor, customers routinely buy a scoop of ice cream for $3. If consumers purchase one scoop of ice cream at $3, why don't they keep buying more and more scoops for $3 until the store sells out?
- Refer to the table above. Each dessert is priced at $1. If you had $10 to spend on desserts, which of the following combinations of goods would you buy? a. 5 units of brownies, 4 units of ice cream,
- Suppose Annabelle's favorite ice cream flavor, strawberry, costs $1.50 per cone and chocolate costs $1.00 per cone. If she receives 10 utils when she eats chocolate ice cream, how many additional utils would she need to get from eating strawberry ice crea
- There is an ice cream monopoly in the town of Eureka. The monopoly firm is deciding how many ice cream carts to distribute in the town. Each cart has a cost of 1. The consumers have a utility for ice cream of V = 10. The unit transport cost of the consume
- If an ice-cream manufacturer acquires a frozen yogurt producer, you would likely see: a. Higher prices for ice cream, but lower prices for frozen yogurt b. Lower prices for both the ice cream and the frozen yogurt c. Higher prices for frozen yogurt but lo
- There is an ice cream monopoly in the town of Eureka. The monopoly firm is deciding how many ice cream carts to distribute in the town. Each cart has a cost of 1. The consumers have a utility for ice cream of V=10. The unit transport cost of the consumers
- Pam has $8 a day to spend on bottled water and ice cream. The price of a bottle of water is $1.00 and the price of an ice cream cone is $2.00. a. Draw Pam's budget line and label it. b. When Pam spends all her budget and she buys 4 ice cream cones, how ma
- Consider Lisa's total willingness to pay (WTP) for ice cream in the table. If the price of ice cream is $1.50 and Lisa aims to maximize her well-being, how many ice creams will she consume and what is
- A local supermarket lowers the price of its vanilla ice cream from $3.50 per half-gallon to $3.00. Vanilla ice cream unit sales increase by 20 percent. The store manager notices that the unit sales of chocolate syrup increase by 10 percent. How would you
- Jacob receives an allowance of $5 per week. He spends all his allowance on ice cream cones and cans of Lemon Fizz soda. a) If the price of ice cream cones is $0.50 per cone and the price of cans of Le
- Because of government price controls, a business must now sell soft-serve ice cream at half its original price. This business might respond by: A. offering smaller servings of ice cream. B. skimping on toppings of nuts, fudge sauce, and cherries. C. red
- Suppose you are interested in purchasing just ice cream and cake for an upcoming birthday party. Assume you have only $45 to spend, the price per cake is $10, and the price per package of ice cream is $5. You have estimated the utility (or satisfaction fr
- Ice cream usually comes in 1.5-quart boxes (48 fluid ounces), and ice cream scoops hold about 2 ounces. However, there is some variability in the amount of ice cream in a box as well as the amount of ice cream scooped out. We represent the amount of ice c
- Elizabeth owns an ice cream parlor. In one hour, she produces 20 milkshakes and 40 sundaes. Ben also owns an ice cream parlor. In one hour, he can produce 10 milkshakes and 25 sundaes. a. What is Elizabeth's opportunity cost of 1 milkshake? b. What is Ben
- Suppose Icecream company has gained exclusive rights to sell Icecream in State College. The demand for Icecream is Q = 3000 - 60P. The total cost of producing Icecream is C(Q) = 6Q for Q orders of the
- If the owner of an ice cream store on Kirkwood Avenue charges $1.20 for an ice cream cone, her total revenue is $540 per day. If she lowers the price to $1.00, total revenue falls to $500 per day. The demand for ice cream on Kirkwood Avenue is: a. elastic
- A local supermarket lowers the price of its vanilla ice cream from $3.50 per half-gallon to $3.00. Vanilla ice cream unit sales increase by 20 percent. The store manager notices that the unit sales of chocolate syrup increase by 10 percent. What is the pr
- A newspaper story on the effect of higher milk prices, on the market for ice cream, contained the following. "As a result (of the increase in milk prices), retail prices for ice cream are up 4% from l
- You have eaten two bowls of ice cream at Sundae School Ice Cream store. You consider eating a third. As a rational consumer you should make your choice by comparing: a) The benefits from eating all three bowls of ice cream to how much three bowls of ice c
- Which of the following would be classified as a fixed cost for the local supermarket? a. The cost of the boxes of cereal sold in the supermarket. b. The salary paid to the store's manager. c. The rent from the six-year lease on the building where the stor
- Refer to the table below. If the price of a fudge bar is $2, the price of a Popsicle is $1, and a student has $9 to spend on fudge bars and popsicles, what quantities will she purchase at a consumer o
- You are using money as a store of value when you A. purchase an ice cream cone. B. save for a vacation. C. tell a friend how much you paid for your new car. D. buy something on sale and get good value for your money.
- Bob and Esther each own an ice cream parlor. In an hour, Bob can produce 8 milkshakes or 32 ice cream sundaes and Esther can produce 16 milkshakes or 96 ice cream sundaes. Bob's opportunity cost of producing 1 milkshake is Blank ice cream sundaes. Esthe
- Which of the following is a relevant cost? a. sunk cost b. historical cost c. replacement cost d. fixed cost e. all of the above
- If Jennie spends her income on ice cream and biscuits and the price of ice cream is three times the price of biscuits, then: a. She maximizes her utility by buying equal quantities of ice cream and biscuits, b. She maximizes her utility by buying three ti
- 1. Refer to the table below. If the price of a fudge bar is $2, the price of a Popsicle is $1, and a student has $9 to spend on fudge bars and popsicles, what quantities will she purchase at a consume
- Which of the following would be an example of a sunk cost? a. A large tobacco harvester that a farmer has already purchased. b. Seed corn that the farmer is considering purchasing for next year. c. Wo
- Suppose Juan has a demand for ice cream that can be expressed as P = 2.50 - .25Q. Furthermore, suppose the ice cream store has a fixed MC = 1.00. What is the largest fixed fee it can charge Juan and s
- The table shows some data on the quantity of ice cream consumed at different prices and at different temperatures. Draw the relationship between the quantity of ice cream consumed and the price of ice cream when the temperature is 50 degrees Fahrenheit.
- Given a normal market supply curve for ice cream, if the surgeon general states that ice cream causes cancer, then: a. there is an increase in the quantity supplied of ice cream. b. there is a decrease in the supply of ice cream. c. there is an increase i
- Draw three points that show the quantity of ice cream consumed and the temperature when the price of ice cream is 1.50 Price 50 degrees, 70 degrees, and 90 degrees 0.50. 20. 25. 40 1.50 2.50. 10. 15.
- Assume that consumers are uniformly distributed along a one-mile stretch of beach. A number of ice cream vendors are pondering where to position their carts. If the price they are allowed to charge is
- Colin and Isabelle both have a weekly dessert budget of $20. The price of an ice cream cone is $2.50, and the price of a candy bar is $1.25. Using a Consumer Choice Theory diagram (budget line & indif
- Dan's ice cream shop is a perfectly competitive firm selling 100 ice cream cakes per day. The market price of a cake is $10, AVC is $9 and its AFC is $2. Should Dan continue to produce, increase production, decrease production, or shut down his cake busi
- The demand for chocolate chip cookie dough ice cream is likely quite elastic because of which of the following: A. ice cream must be eaten quickly. B. this particular flavor of ice cream is viewed as a necessity by many ice-cream lovers. C. the market is
- The cost of producing ice cream is $1.20 per unit. The market sale is targeted as 1,000 units per month. What will be the monthly profit if the revenue is $2,200 per month? a. $1,500 b. $1,000 c. $1,2
- Ike's Ice Cream has decided to open a new ice cream parlor in Mayville, MS. The market for ice cream parlors is monopolistically competitive. As a result of the new Ike's Ice Cream parlor, existing ice cream shops located in Mayville are likely to experie
- Suppose Mary's utility function for Wegman's ice cream (W) and Top?s ice cream (T) is U = W + T. Wegman's ice cream costs $5 each and Top?s ice cream costs $4. Mary has $100 income. Find Mary's opti
- Which of the following is a normative statement? A. The price of candy bars is $2.25 each. B. Popcorn and soda are sold in movie theaters. C. Candy bars are more expensive than newspapers. D. You should eat less chocolate.
- Which of the following is an implicit cost for the owner of a small store in a town? A. The wage that is paid to the assistant manager. B. The cost of purchasing canned goods from a wholesale food distributor. C. The value placed on the owner's skills in
- Graeter's ice cream line includes smoothies and sorbets. Do you think it should consider a brand extension into yogurt, low-fat ice cream, coffee drinks, or other related products? Why or why not?
- 4) Consider the market for ice cream cones in a small town. There are many potential ice cream vendors. Demand for ice cream cones is given by P(Q) = 90 - 2Q. a. Suppose all the potential ice cream v
- Sam only gets utility from ice cream (x) and video games (y). Assume his utility function is U(x, y) = xy and that he has an annual income of $400. The price of ice cream is $8 and the price of a vide
- Two ice cream trucks A & B are playing a simultaneous pricing game. If one of them prices low, he gets all the customers, a payoff of 12, while other gets zero. If both price high they each get a payoff of 6 and if both price low, they get a payoff of 5.
- Two ice cream trucks, A&B are playing a simultaneous pricing game. If one of them prices low, he gets all the customers, a payoff of 12, while other gets zero. If both price high they each get a payof
- Ike's Ice Cream has decided to open a new ice cream parlor in Mayville, MS. The market for ice cream parlors is monopolistically competitive. As a result of the new Ike's Ice Cream parlor, existing ic
- Iggy's Ice Cream Shack sells ice cream. The quantity of output (pounds of ice cream scooped per day) and the corresponding number of workers per day are in the following table:
- Leila bought the perfect combination of oranges and ice cream to enjoy for dinner. Oranges cost $0.50 and icecreams cost $3. If the last orange she eats increases her utility by 1, the last icecream she eats must increase her utility by: a. 1 b. 6 c. 3
- Suppose that you close down your coffee shop and sell your coffee maker for $500. If you originally bought the coffee maker for $4,000 and it lost $1,000 because of depreciation (i.e., age and use), the sunk cost of the coffee maker is: A. $3, 500. B. $
- Which is NOT an example of bundling? A. An extra value meal at Wendy's B. A buy-one-get-one-half-off sale at Foot Locker C. Microsoft Office D. A large tub of popcorn at the movie theatre
- The Olde Yogurt Factory has reduced the price of its popular Mmmm Sundae form $2.25 to $1.75. As a result, the firm's daily sales of these sundaes have increased from 1,500 per day to 1,800 per day.
- What effect could the following have on the supply for pizza? a. The price of cheese increases. b. A new pizza franchise named Pizza Palace enters the market. c. A new pizza oven is created that cuts the time in half to cook a pizza. d. If you lived
- Which of the following goods is perfectly elastic? a. A life-saving medication, b. Photocopies that cost 11 cents per copy at one copy shop and 10 cent per copy at this shop's competitor located next door, c. A fast-food restaurant located in the food cou
- Which of the following is an example of third-degree price discrimination? A. Costco and Sam's Club charge $50 annual memberships to shop. B. Six packs of soda are sometimes only twice as expensive as a single bottle. C. Several local pizza parlors offer
- You own an ice cream parlor: a. List several variable factors of your ice cream parlor that must be modified or changed to increase the number of ice cream cones in the short run. b. What aspects of your business cannot be changed in the short run? c. E
- The only frozen yogurt shop in town is being closed down by city ordinance. Before that, Jerry has one last chance to buy his favorite flavors: chocolate and raspberry. He surveys the prices offered at the shop and purchases his best affordable combinatio
- Suppose Hubert and Kate are the only suppliers for ice cream cones in a particular market. The following table shows their monthly supply schedules. Plot Hubert's and Kate's supply of ice cream cones. Also, plot the market supple of ice cream cones.
- What will be the cost of buying 12 dozen bananas if one banana costs $2?
- Examine the table Total Cost and Output. The table describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. What is the minimum price that Sergei needs to receive for a tub of ice cream in order to stay in business in the l
- Suppose you have three options for the last $5 in your pocket: a cappuccino you value at $6, a smoothie you value at $7, and a frog. What is the (opportunity) cost of purchasing the frog?
- Harry purchases butterbeer (B) and chocolate frogs (C) and has the following utility function: U(B,C) = min(4B,C). He has $360 to spend on butterbeer and chocolate frogs. Suppose that the price of but
- Which of the following is an example of a menu cost? Select all that apply: a. Lisa cannot decide what to order at a restaurant as prices seem too high, b. Ron's retail clothing business needs to pay the local printing shop to make new catalogs due to an
- Assume that fixed costs are $10. What is the average total cost of 4 cakes? A. $25.00 B. $12.00 C. $35.00 D. $9.50
- Tammy's preferences for ice cream, x, and coffee, y, can be represented by the following utility function: U = x^{1/3}y^{2/3}. The price of ice cream is initially $4, and the price of coffee is $1. Ta
- A subsidy is the opposite of a tax. With a $0.50 lax on the buyers of ice-cream cones, the government collects $0.50 for each cone purchased; with a $0.50 subsidy for the buyers of ice-cream cones, the government pays buyers $0.50 for each cone purchased.
- Sam only gets utility from ice cream (x) and video games (y). Assume his utility function is U(x, y)=xy and that he has an annual income of $400. The price of ice cream is $8 and the price of a video
- Suppose that Donald has $200 to spend per week and he buys only ice cream and pizza. Suppose further than pizza is a normal good and that for pizza income effect dominates the substitution effect. If the price of a pizza doubles, which of the following is
- Two ice-cream stands arc deciding where to set up along a 1-mile beach. The people are uniformly located along the beach, and each person sitting on the beach buys exactly 1 ice-cream cone per day from the nearest stand. Each ice-cream seller wants the ma
- Two ice-cream stands are deciding where to set up along a 1-mile beach. The people are uniformly located along the beach, and each person sitting on the beach buys exactly 1 ice-cream cone per day from the nearest stand. Each ice-cream seller wants the ma
- Harry purchases butterbeer (B) and chocolate frogs (C) and has the following utility function: U(B,C)=min(4B,C). He has $360 to spend on butterbeer and chocolate frogs. Suppose that the price of butt
- Are ice cream and frozen yogurt substitutes, complements, or neither? Explain.
- Which of the following is an implicit cost of going to college? A Tuition B Cost of books and supplies C Room and board D Foregone wages
- Budget for a Pizza and Milkshakes: $30 Pizza Slices ($2.50 per Slice) Units of milkshakes ($1.50 per) According to the chart above, the opportunity costs are a. 1 & 2/3 milkshakes for a pizza slice
- Would the cost of the boxes of cereal sold in a supermarket be classified as a fixed cost for the supermarket? Explain.
- Which one of the following is not a part of the opportunity cost of attending college? (a) Cost of tuition (b) Cost of textbooks (c) Cost of meals (d) Income that could have been earned by working (e) All of the above.
- Suppose that the company Mama's Pies adds another store to sell its pastries. Supposed that it costs $400,000 to build the new store and assume that the new store will generate revenues of $450,000. W
- You are thinking of setting up a lemonade stand. The stand itself costs $200. The ingredients for each cup of lemonade cost $0.50. You charge $1.00 for each cup of lemonade. a. What is the fixed cost (FC) of doing business? b. What will be the total c
- Consider a pizzeria that bakes and sells pizzas using machinery and labor. Which of the following best describes one of its short run variable costs? A. the facility where the pizzas are baked B. The
- A) Suppose Pepsi Cola, which includes Mt. Dew and several other sodas, purchased Coca-Cola & Coke's family of sodas to form one large mega-company. What do you believe would happen to the price of sodas in the United States? B) What would happen to the re
- Sara's income is $12 a week. The price of popcorn is $3 a bag and the price of a smoothie is $3. What is the equation for Sara's budget line? (Q_s is the quantity of smoothies and Q_P is the quanti
- Marty's frozen yogurt shop sells cups of frozen yogurt in a local university town. He owns three frozen yogurt machines. His other inputs are refrigerators, frozen yogurt mix, cups, sprinkles, and wor
- According to data collected at Meijer in 2019 (fifty-two years after 1967), ice in perfectly clear cubes is now approximately $0.20 per pound (10 pounds for $1.99). The CPI for 2019 is approximately 746.75 in 1967 dollars. Based on the 2019 price and CPI,
- During 2016 a regional supplier of ice cream experimented with price levels at its numerous retail shops to determine the price elasticity of its key product lines. The following table depicts prices
- You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and a candy bar will also cost you $1. If you choose the bag of chips, the opportunity cost of buying the chips is: a. $1. b. the enjoyment you would have received from the c
- Which of the following would be classified under C when calculating GDP? A. A homeowner mowing her own lawn B. $40.00 spent eating out at a restaurant C. The purchase of new computer software by an accounting firm D. Flour purchased by a baker to make don
- Suppose that in this city, the price of a spaghetti dinner changes from $10 to $15. Which of the following statements correctly describes what happens? I. There is a reduction in the number of dinners
- Refer to the table below to answer the following questions. 1) What is the opportunity cost of the first popsicle in relation to Ho-Hos? 2) What is the opportunity cost of the 70th popsicle in relatio
- Suppose a person has $8.00 to spend only on apples and bananas. Apples cost $0.40 each, and bananas cost $0.10 each. A) If this person buys only apples, how many can be purchased? B) If this person bu
- Imagine you've started a new pizza restaurant. It costs you about $6 to produce a pizza. Last week you sold 500 pizzas for $12 each. This week you raised your price and sold 375 pizzas for $14 each. What price should you be charging?
- Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, the dairies produce cream which is made into ice cream. In the market for low-fat milk, the following events occur one at a time: a. The wage rate of dairy workers rise
- Which of the following is not a fixed cost for a small business? a) a worker's wage of $15 per hour. b) gasoline at $4 a gallon for deliveries. c) $100 spent on raw materials d) a month to month rent
- Which of the following would not be illegal according to the Robinson-Patman Act? a. "Party Packers" getting 10 cents off every pack of ribbon they buy after 1000 units. b. "Fred's Farms" offering 50 cents off a crate of strawberries to retailers to mat
- Suppose a person has $ 8.00 to spend only on apples and bananas. Apples cost $ 0.40 each, and bananas cost $ 0.10 each. a) If this person buys only apples, how many can be bought? b) If this person bu
- Which one of the following is a part of the opportunity cost of attending college for an individual who lives on their own? A) cost of clothing B) cost of transportation C) cost of renting movies D) cost of tuition E) cost of meals
- Imagine you've started a new pizza restaurant. It costs you about $3 to produce a pizza. Last week, you sold 450 pizzas for $12 each. This week, you raised your price and sold 300 pizzas for $16 each.
- For which of the following manufactured products would job costing be more appropriate than process costing? A. designer dresses for celebrities B. Liquid soap C. Chemicals D. Paint
- Which of the following is an example of menu costs? a. deciding on new prices b. printing new price lists c. advertising new prices d. all of the above are examples of menu costs
- The small town of Narbeth has two pizza stores. Which of the following statements are correct? I. The profits of each store depend on the price of the pizza at the other store. II. Both stores would increase their profit if they cooperated in setting the
Explore our homework questions and answers library
Browse
by subject