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Should tray agree to provide the shirts chapter 2

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fers to buy 1000 shirts at seven dollars each. Should Tray agree to provide the shirts? Chapter 2 - Economics of One Unit Answer Section MATCHING 1. ANS: D PTS: 1 2. ANS: G PTS: 1 3. ANS: B PTS: 1 4. ANS: F PTS: 1 5. ANS: H PTS: 1 6. ANS: I PTS: 1 7. ANS: A PTS: 1 8. ANS: J PTS: 1 9. ANS: E PTS: 1 10. ANS: C PTS: 1 MULTIPLE CHOICE 11. ANS: C PTS: 1 12. ANS: D PTS: 1 13. ANS: A PTS: 1 14. ANS: B PTS: 1 15. ANS: D PTS: 1 SHORT ANSWER 16. ANS: Because one unit of sale is the most basic “thing” that a business sells, the profit on that unit is a picture of the whole company. If the basic unit of sale doesn’t earn the entrepreneur a profit, the business can’t make a profit overall, no matter how many units it sells. Similarly, by studying the economics of one unit of sale, an entrepren- eur can figure out the gross profit per unit of sale and then know how to make the whole business more profitable or productive by adjusting his or her cost of goods sold. PTS: 1 17. ANS: The entrepreneur may discover that, by hiring someone else to do the work or help do the work, his/her time is freed up to grow or to operate the business. If the business grows, he or she will make more profit overall, even if the gross profit per unit of sale decreases to pay for the employee’s labor cost. A higher cost of goods may lower the gross profit, but it may also permit the company to do more or allow the owner to focus on being the leader. Gross profit is traded for volume, for additional owner leadership, and for overall business growth.
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