When a manufacturer produces 25 tables, the marginal and average costs are both equal to $50 per table. A 26th table raises the marginal cost to $54 per table and the average cost to $52 per table. What is the firm's elasticity of supply when 25 table are produced?
a. 1/4.
b. 1/2.
c. 1.
d. 2.
b. 1/2.
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What is one problem with using a Clarke tax to finance government provision of a public good?
a. People tend to overstate their preferences for the public good when a Clarke tax is imposed. b. The government may decide against providing the public good, even when it would be efficient to do so. c. The Clarke tax is not a fair tax, because everyone pays the same amount regardless of income. d. The revenues collected from the Clarke tax may not cover the cost of the public good.
In 2015, health care's share of gross domestic product in the United States was about
A) 6.5 percent. B) 18 percent. C) 45 percent. D) 62.5 percent.
In 1994, the state of California suffered a devastating earthquake. To help pay for the damages, the state raised its sales tax by one cent per dollar of expenditure on most consumer goods
This state sales tax is an example of what economists call: A) an ad valorem tax. B) a specific tax. C) a neutral tax. D) a negative tax. E) none of the above
Which of the following is not a common response to the moral hazard problem that employers face?
a. offering all employees some funding for additional education b. paying efficiency wages c. requiring employees to provide itemized receipts for reimbursable expenses d. paying year-end bonuses rather than higher monthly earnings