Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process: Name of CompanyRevenuesCost of Purchased inputsFulton Family Farm$0.500DeLux Popcorn Co.$2.50$.50Friendly Groceries$4.00$2.50What is the value added of DeLux Popcorn Co.?
A. $2.00
B. $1.50
C. $0.50
D. $2.50
Answer: A
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Suppose you are given the following demand data for a product.PriceQuantity Demanded$1030940850760670The price elasticity of demand (based on the midpoint formula) when price increases from $7 to $9 is
A. -1.16. B. -2.27. C. -1.60. D. -.63.
In 2006, the base price of a Hummer SUV was about $30,000. By 2008 as gasoline prices increased,
A) the demand curve for Hummers shifted leftward and Hummer prices decreased. B) the demand curve for Hummers shifted rightward and Hummer prices increased. C) there was a movement down along the Hummer demand curve. D) there was a movement up along the Hummer supply curve.
Behavioral economics deals with
A) the assumption that people are always selfish. B) bounded rationality. C) unbounded willpower. D) only theories without justification from empirical evidence.
A consumer values a car at $30,000 and a producer values the same car at $20,000 . If the transaction is completed at $24,000 . the transaction will generate:
a. No surplus b. $4,000 worth of seller surplus and unknown amount of buyer surplus c. $6,000 worth of buyer surplus and $4,000 of seller surplus d. $6,000 worth of buyer surplus and unknown amount of seller surplus