Which of the following would be classified as a variable cost for the local Texaco station?
A) interest payments to a local bank for a 5-year loan
B) the total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week
C) the premiums paid for liability insurance, which are constant throughout the life of the contract
D) the opportunity cost of money used to finance the installation of some new pumps
B
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If reckless drivers are more likely to buy automobile insurance than safe drivers are,
A) a moral hazard has occurred. B) adverse selection has occurred. C) the market for insurance is efficient. D) then automobile insurance will be fairly priced.
Maximizing surplus in a market depends not only on the amount bought and sold, but also on:
A. what those consumers do with it. B. how productive the sellers are. C. who buys and sells it. D. None of these statements is true.
Suppose a firm produces its output in two different plants. Production costs at plant 1 are given by C1 = 4(Q1)2, where Q1 is the amount of production at plant 1. The production costs at plant 2 are given by C2 = 2(Q2)2, where Q2 is the amount of production at plant 2. The corresponding marginal costs at each plant are MC1 = 8Q1 and MC2 = 4Q2. If the firm produces a total of 24 units of output, how much output should it produce at each plant?
What will be an ideal response?
A shift in aggregate supply is likely to:
a) Reduce the general price level and reduce national income b) Reduce the general price level and increase national income c) Increase the general price level and reduce national income d) Increase the general price level and increase national income