Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. If Larry were to decrease the production of lassos, which of the following is true regarding the company's costs?
A. The fixed cost of the rope cutting machine would stay the same.
B. The variable costs of rope would drop to zero.
C. The fixed cost of the employee's wages would stay the same.
D. None of these is true.
Answer: A
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homes. A) rise; harder B) fall; harder C) fall; easier D) rise; easier
What do diseconomies of cities include?
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