In 2008, Precision Pattern Interiors, which makes high-end aircraft interiors, began a $1 million renovation of a building at the Hutchinson Air Base Industrial Tract south of Yoder, Kansas. The company also planned to add some $400,000 in new equipment and triple its Yoder work force. Which of Precision Pattern Interiors' decisions is a long run decision?
A) $1 million renovation of a building at the Hutchinson Air Base Industrial Tract and $400,000 in new equipment purchases
B) $1 million renovation of a building at the Hutchinson Air Base Industrial Tract
C) $400,000 in new equipment purchases
D) triple its Yoder work force

Question

Quizplus · Accepted Answer

In economics, a long-run decision involves changes in all factors of production, including capital and labor. The renovation and equipment purchases indicate a long-term investment in capital, while workforce expansion indicates a long-term change in labor.

In 2008, Precision Pattern Interiors, Which Makes High-End Aircraft Interiors