To signal to your insurance company that you are a low risk individual, to secure a lower premium, you should
a. Accept an insurance policy with a high deductible
b. Accept an insurance policy with a low deductible
c. Accept an insurance policy with a co-payment
d. Both A&C
Question 2
A manager invests 400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from 2 to 1.85 . After a year, the manager has an opportunity to outsource production to another company at a cost per unity of 1.75 . If you are the manager, you
a. should consider the 400,00 . as sunk cost and therefore it should not be relevant to the decision.
b. should base your decision upon economic profit and not accounting profit
c. should avoid the fixed-cost fallacy
d. all the above
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