Question

Boeing is a producer of wide‑body aircraft.

a. The manufacturing plant used to produce aircraft is a fixed

• variable
• fixed

cost for Boeing. The cost of the manufacturing plant should

• should
• should not

be included in the opportunity cost of producing an additional aircraft.

b. The labor used to produce the aircraft is a fixed

• fixed
• variable

cost for Boeing. Labor costs should

• should
• should not

be included in the opportunity cost of producing an additional aircraft.

c. The cost of the seats that are installed in each aircraft is a fixed

• fixed
• variable

cost for Boeing. The cost of the seats should not

• should not
• should

be included in the opportunity cost of producing an additional aircraft.

Answer 1

a) can be mentioned that the cost of the plant that is used to produce aircraft is a fixed cost because it is the initial investment and no matter the amount of planes you produce the cost of manufacturing a plant would always be the same.

(ii) fixed is the answer to this question

b)the cost of manufacturing a plant should not be included in the opportunity cost because it is the part of production process and opportunity cost is the cost given up for the production of aircrafts therefore

(ii) should not is the answer to this question

c) the cost of seats that are installed in each aircraft can be considered as a variable cost because the cost depends on the number of seeds produced

Therefore (ii) variable is the answer to this question

(d) the cost of seeds also should be considered in the opportunity cost because it is also in the construction process of an aircraft but not the sacrifice cost other purposes

Therefore (II) should not is the answer to this question