At one time sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the total cost of making two fake killer whales would be:

A. $21,000.
B. $11,000.
C. $16,000.
D. $10,000.


Answer: A

Economics

You might also like to view...

If short-term government bond rates were indexed

A) such bonds would be a poor hedge against inflation. B) banks and saving and loan institutions would likely lose deposits. C) the government would gain from the implied inflation tax. D) the government would gain from the implied inflation subsidy.

Economics

Which of the following represents a good example of an oligopoly?

A) the agriculture industry B) a public utility C) the automobile industry D) the restaurant industry

Economics

Firms that face capacity constraints can increase output only up to the capacity, but no further. Therefore, firms

a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions

Economics

Constant returns to scale refers to when:

A. an increase in the quantity of output decreases average total cost in the long run. B. an increase in the quantity of output increases average total cost in the long run. C. average total cost does not depend on the quantity of output in the long run. D. None of these is true.

Economics