Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.
-Refer to Table 13-12. During the week of July 4th, Eileen doesn't produce any earrings. What are her costs during the week?
A)$0
B)$150
C)$275
D)$425

Question

Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. 
-Refer to Table 13-12. During the week of July 4th, Eileen doesn't produce any earrings. What are her costs during the week?
A)$0 
B)$150 
C)$275 
D)$425

Quizplus · Accepted Answer

Eileen's costs during the week are $150, which are her fixed costs, as she doesn't produce any earrings and thus incurs no variable costs.

Table 13-12 Eileen's Elegant Earrings Produces Pairs of Earrings for Its Mail