In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits
a. diseconomies of scale because total cost is rising as output rises.
b. constant returns to scale because average total cost is constant as output rises.
c. diseconomies of scale because average total cost is rising as output rises.
d. economies of scale because average total cost is falling as output rises.
b
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Claire bought a new TV, and the old one sits in her basement untouched. If Claire were rational, what would she do with the old TV?
A. Throw it away because she doesn't really value it anymore. B. Sell it for its market value, because that is the opportunity cost of having it sit in her basement. C. Give it away, because it is worth more to someone else than Claire. D. Either sell it for the value of her new TV or keep it.
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Kaitlyn and Larissa have formed a dog bathing and grooming business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. The opportunity cost of grooming the first dog in a day is bathing ________ dog(s).
A. 1 B. 2 C. 24 D. 25
Suppose there was a banking crisis. The money supply would shrink by the greatest amount if the public ________ their currency-deposit ratio and the banks ________ their reserve-deposit ratio.
A. decreased; increased B. increased; decreased C. increased; increased D. decreased; decreased
What is the present value of four payments of $5,000 at the end of each of the next four years if the interest rate is 2 percent?
A) $9,430.50 B) $20,000.00 C) $19,038.64 D) $18,358.12