Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces
A. more, the costs of Kyle's factory will exceed those of Stan's factory.
B. less, the costs of Kyle's factory will exceed those of Stan's factory.
C. less, their costs will be equal.
D. more, their costs will be equal.
Answer: B
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Today the U.S. dollar is worth 1.5 Canadian dollars. Because of changes in economic conditions, people come to believe that by the end of the month the U.S. dollar will be worth 1.2 Canadian dollars. This belief
A) increases the demand for U.S. dollars today. B) decreases the demand for U.S. dollars today. C) decreases the demand for Canadian dollars today. D) decreases the value of exports to Canada.
Which of the following is a reason why the measurement of GDP is not useful in the measurement of the standard of living of a country?
a. GDP includes what is spent on environmental protection and health care, but it does not include actual levels of environmental cleanliness and health. b. GDP includes the income of the non-residents of a country, and as a result does not reflect the actual income of the residents of the country. c. GDP includes the value of exports of a country, but it does not include the scarcity of goods and services within the country that is created due to exports. d. GDP includes many non-economic activities, but it ignores crucial economic activities like imports.
Geometrically, the marginal product
A. is the slope of the average product curve. B. is the slope of the line joining the origin to the corresponding point on the total product curve. C. is that point at which the total product curve exhibits diminishing returns. D. at any point is the slope of the total product curve at that point.
Why is a good considered to be inferior by economists?
a. The change in income and the change in demand move in opposite directions. b. The product has poor quality, thereby lowering demand. c. The change in income and the change in demand move in the same direction. d. The product’s demand decreases despite its high quality.