A Publishing House Is Using 400 Printers and 200 Printing

question 7

Multiple Choice

A publishing house is using 400 printers and 200 printing presses to produce books. The printers' wage rate is $20 and the price of a printing press is $100. The last printer added 20 books to total output, while the last printing press added 50 books to total output. The publishing house

• A) is using the cost-minimizing combination of printers and printing presses.
• B) should use more printers because they are cheaper than printing presses.
• C) should use more printing presses because they are more productive than printers.
• D) could produce the same number of books at a lower cost by using more printing presses and fewer printers.
• E) could produce the same number of books at a lower cost by using more printers and fewer printing presses.

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Definitions:

Budget Surplus

A financial situation where a government's or organization's revenue exceeds its expenditures over a given period.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true yield to lenders or investors.

Budget Surplus

The financial situation in which a government's revenues exceed its expenditures over a specified period of time.

Foreign-Currency Exchange

The process of exchanging one currency for another, enabling international trade and finance.