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Managerial Economics · Quiz 1 · 23 Feb 2025 · January 2025 term

Question 2: Your implicit cost will be

Question 2

+1 markOne correct option

Imagine that you have started a snack food delivery business on your college campus. Students send you orders for snacks, such as potato chips and candy bars, via the Internet. You shop at local grocery stores to fill these orders and then deliver the orders. To operate this business, you pay $500 a month to lease computer time from a local Web-hosting company to use its server to host and maintain your website. You also own a sports utility vehicle (SUV) that you use to make deliveries. Your monthly car payment is $300, and you pay $100 a month in insurance costs. Each order that you fill takes, on average, a half hour and consumes $0.50 worth of gasoline. When you fill an order, you pay the grocer for the merchandise. You then collect a payment, including a delivery fee, from the students to whom you sell. If you did not operate this business, you could work at the campus dining hall, earning $6 an hour. Right now, you operate your business five days a week, Monday through Friday. On weekends, your business is idle, and you work in the campus dining hall.
Based on the above data, answer the given subquestions.

Your implicit cost will be

  1. A

    $300 car payment

  2. B

    $100 a month insurance cost

  3. C

    Your wage at campus dining hall $6 an hour

  4. D

    All of these

Show answer

Correct answer

  • C

    Your wage at campus dining hall $6 an hour

Question 2 of 21 in the IIT Madras BS Managerial Economics (Managerial Economics) Quiz 1 paper sat on 23 Feb 2025, in the January 2025 term (IIT M DEGREE AN EXAM QDB2 23 Feb 2025). It carries 1 mark.

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