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

Recognize the implications of different types of sales (cash or credit) on financial statements.

Understand the components and purpose of a Balance Sheet.

Comprehend current tax laws and their implications on investments.

Calculate the depreciation and understand its impact on the Balance Sheet.

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Definitions:

Negative

A term indicating something less than zero or lacking in positivity, often used in financial contexts.

Income Elasticities

Income elasticities measure how the quantity demanded of a good changes in response to a change in consumers' income.

Normal Goods

Goods for which demand increases as consumer income rises, and decreases as consumer income falls.

Inferior Goods

Goods for which demand decreases as consumer income rises, in contrast to normal goods, where demand increases with higher incomes.