Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000 . The marginal cost of making a wedding cake is $300 . In order to maximize profits, Laura should
a. make more than 20 wedding cakes per month.
b. make fewer than 20 wedding cakes per month.
c. continue to make 20 wedding cakes per month.
d. We do not have enough information to answer the question.
b
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The total utility you get from eating slices of pizza on a given night is the
A) marginal utility of the last slice times the total number of slices eaten. B) sum of the differences in marginal utility as you increase the number of slices eaten. C) sum of the marginal utilities of all slices eaten. D) sum of the marginal utilities per dollar spent on all slices eaten.
Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the service to each of them is $50 and it costs $80 to hire a housecleaner. Should they hire a housecleaner?
A) No, because each will wait for the other to hire the housecleaner. B) Yes, but only if a housecleaner will accept $50 so that each can take turns to pay the housecleaner. C) No, because it will be difficult for them to agree on which housecleaning service to use. D) Yes, if each contributes $50, then each stands to gain a consumer surplus.
Ajax Corporation has just decided to let managers work from home one day a week. This decision will make working conditions better and will
A) cause the demand curve for labor for managers to increase. B) increase the elasticity of demand for labor for managers. C) lead to an increase in the supply curve of labor for managers. D) leave the supply curve of labor unchanged.
Which of the following will not cause the demand for product K to change?
A. A change in consumer tastes B. An increase in consumer incomes C. A change in the price of K D. A change in the price of close-substitute product J