If a Ton of Steel Sells for $15,000 and a Car

question 41

Multiple Choice

If a ton of steel sells for $15,000 and a car made from a ton of steel sells for $30,000, then if all markets are perfectly competitive, how many cars can be made from the last ton of steel used by a profit-maximizing firm?

• A)1/3 car
• B)1/2 car
• C)1 car
• D)1.5 cars

Realize the role of government and private sector in regulating externalities through permits, taxes, and subsidies.

Analyze the implications of assigning and negotiating property rights in different contexts.

Understand the concept of environmental economics and its approach to managing pollution and external costs.

Understand the fundamental principles of tort liability.

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Definitions:

Capital Investment Analysis

A financial analysis method used to evaluate the potential profits and risks of investment projects.

Federal Income Tax Ramifications

These are the effects or consequences that federal tax laws have on individuals, investments, and business transactions.

Leasing Alternatives

Options available to businesses or individuals for obtaining the use of equipment or property through leasing agreements rather than purchase.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.