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 variable costs of rope would drop to zero.
B. The fixed cost of the rope cutting machine would stay the same.
C. The fixed cost of the employee's wages would stay the same.
D. None of these is true.
B. The fixed cost of the rope cutting machine would stay the same.
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If interest rates in Europe fall below interest rates in the United States, then, other things equal, the demand for euros will decrease
a. True b. False Indicate whether the statement is true or false
In the long run,
a. all of the firm's input quantities are variable. b. the firm can vary the quantities of some but not all inputs. c. managers become less efficient. d. the total cost of producing any given level of output is greater than or equal to the short-run total cost of producing that level of output.
Which of the following is true of the tax and transfer programs of the United States?
a. Tax-transfer programs persistently redistribute income from the rich to the poor. b. Social Security, the largest transfer program, redirects income toward the elderly, a group with above-average levels of both income and wealth. c. The bulk of agriculture subsidies go to large farmers with above-average incomes. d. Taxes generally take a larger share of the income of the poor than is true for those with higher incomes. e. Both b and c are true.
If the absolute value of the own price elasticity of demand is greater than 1, then demand is said to be:
A. unitary elastic. B. elastic. C. inelastic. D. neither elastic, inelastic, nor unitary elastic.