When Lonnie produces 1 pair of cowboy boots his costs total $300. When he produces 2 pairs of cowboy boots his total costs are $500. This means that Lonnie's marginal cost of producing the second pair of cowboy boots is $200.
Answer the following statement true (T) or false (F)
True
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If the price elasticity of supply for a window manufacturer is 1.5,
a. a 10% increase in the price of windows results in a 15% increase in the quantity of windows supplied. b. supply is considered to be inelastic. c. the manufacturer is likely operating very near capacity. d. All of the above are correct.
As interest rates drop, households tend to borrow more and businesses tend to borrow less
Indicate whether the statement is true or false
Suppose the market demand for good X is given by QXd = 20 - 2PX. If the equilibrium price of X is $5 per unit then consumer surplus is
A. $75. B. $100. C. $25. D. $50.
The economic theory of regulation treats politicians as:
A. public-spirited individuals who work for public welfare. B. self-interested individuals who benefit themselves by supplying legislation. C. corrupt individuals who sell contracts to the highest bidders. D. people who only represent the minority segment of the population.