Refer to Scenario 9.8 below to answer the question(s) that follow. SCENARIO 9.8: Investors put up $1,040,000 to construct a building and purchase all equipment for a new gourmet cupcake bakery. The investors expect to earn a minimum return of 10 per cent on their investment. The bakery is open 52 weeks per year and sells 900 cupcakes per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The bakery charges $8 on average per cupcake.Refer to Scenario 9.8. Total variable costs per week are
A. $600.
B. $1,000.
C. $2,600.
D. $4,000.
Answer: C
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Unregulated natural monopolies:
A. never capture lowest costs per unit possible. B. can capture profits by restricting output. C. create no problems for policy-makers. D. are always protected by government policy.
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Historically, household debt in the U.S. had been:
A. rising steadily since the Great Depression until the early 2000s, when it accelerated. B. fairly constant since the Great Depression until the early 2000s, when it accelerated. C. fairly constant since the Great Depression until the early 2000s, when it declined. D. rising steadily since the Great Depression until the early 2000s, when it declined.