For years, Pinnacle Roofing has been getting nails from its supplier at a rate of $10 per 2,000 nails. The supplier has just informed Pinnacle that the price of nails is going up to $11 per 2,000 nails. As a result, Pinnacle’s average total cost of operation will ______.
a. be higher
b. be lower
c. not change
d. be unpredictable
a. be higher
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Consider a lake stocked with fish. The total value of fish caught at the lake depends on the number of fishers, as shown in the accompanying table. As the table indicates, 1 fisher can catch $36 worth of fish in a day, 2 fishers can catch a total of $66 worth of fish, 3 fishers can catch a total of $90 worth of fish, and so forth. The fishers are identical, and the opportunity cost of a day at the lake is $18 for each fisher.
(i) Complete the table by calculating the value of each fisher's catch, on average, and the social marginal benefit of the lake.
(ii) If use of the lake is nonexcludable, how many fishers come to the lake? What is the total value of their catch? What is their total cost? What is the social gain from the existence of the lake?
(iii) What is the optimal number of fishers at the lake? What is the social gain if this optimum is achieved?
(iv) What entrance fee would lead to the optimal outcome?
Figure 11-1
?
In Figure 11-1, a change in consumer tastes favoring calculators will lead to which movement?
A. A to C B. A to D C. A to B D. A to E
The term "future value"
A. can be determined by inverting the formula for present value. B. is not used in modern public finance analysis. C. refers to the present value of future money. D. includes the shadow prices of all goods used in a project.
Earth Movers & Shakers operates 3 iron ore mines. The accompanying table shows each mine's total daily production and the current number of miners at each mine. All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Total Tons Per DayNumber of MinersMother Lode10025Scraping Bottom3010Middle Drift7515 The opportunity cost of moving one miner from Mother Lode to another mine is:
A. 2 tons per day. B. 1 ton per day. C. 3 tons per day. D. 4 tons per day.