If Homer Operates a Small Bakery and Sells Donuts for $4/dozen

question 69

Multiple Choice

If Homer operates a small bakery and sells donuts for $4/dozen, he should:

• A) sell an additional dozen donuts as long as the marginal cost of producing an additional dozen donuts is less than $4.
• B) sell an additional dozen donuts as long as the total cost of producing an additional dozen donuts is less than $4.
• C) only sell more donuts if his total revenue is greater than his total cost.
• D) sell an additional dozen donuts so long as the fixed cost of production is greater than $4.

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Definitions:

Color Vision

Color vision is the capability of an organism to distinguish objects based on the wavelengths (or frequencies) of the light they reflect, emit, or transmit.

Weber's Law

A principle in psychophysics stating that the smallest change in a stimulus that can be detected is a constant proportion of the baseline stimulus.

Noticeable Difference

The smallest change in a stimulus that can be detected by the senses.

Minimum Change

The least alteration that can occur in a situation or in the value of a variable.