Answer: Insurance premium
Explanation:
Answer:
Economists do not assume that consumers and firms always make correct decisions, instead they assume that consumers and firms make rational decisions
Explanation:
This assumption that firms and consumers make rational decision is based on the economic rationality principle. The principle theorizes that people will usually consider actions, decisions and options based on logical thinking rather than other subjective elements such as morals, psychology and emotion. As a result of this principle economists assume that people will always make rational decisions.
The meaning of this is that consumers and firms would usually weigh the pros and cons of an issue before taking a decision and as described in the correct statement, rational decisions are logical decisions they do not necessarily mean they are correct decisions.
A consumer can make a logical decision to buy a product based on information made available but this may be a wrong decision because the information is misleading or wrong. It is a logical but incorrect decision.
Answer:
The answer is: $100,000
Explanation:
If Hansen Construction spent $930,000 in year 1 of the contract and estimates it still needs $2,170,000 to complete the contract, their total cost for the contract is $3,100,000. Since the contract is fixed price at $3,000,000, then Hansen is going to lose $100,000 with it.
Hansen should recognize the whole $100,000 loss in year 1 as soon as it is able to estimate it.
Answer and Explanation:
The economics of scope refers to the total cost production cost i.e to be averaged for the various type of goods
While on the other hand, the economics of scale refers to the benefit of the cost than occurs when there is a higher production level at a time
Based on this, the classification is as follows
1, Economics of scale as the output rises that declines the LAC so automatically it goes downward
2. economics of scope