Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the price of cowboy hats decreases from $38 to $30
A) consumer surplus will rise by $6.
B) the marginal cost of producing the third cowboy hat will fall to $30.
C) producer surplus will rise from $8 to $24.
D) producer surplus will fall from $22 to $6.
D
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Which of the following would be an example of a nongovernmental solution to a problem associated with externalities?
a. society's preference to drive large cars and SUVs b. new stricter anti-litter laws c. a general moral commitment against using sprinklers during a drought d. tax credits for the purchase of hybrid autos
Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of apples for 3 tons of oranges b. 3 tons of apples for 3 tons of oranges c. 2 tons of apples for 3 tons of oranges d. 1 ton of oranges for 0.2 tons of apples