Table 4-2 -Refer to Table 4-2.The Table Above Lists the Marginal Cost

question 121

Multiple Choice

Table 4-2

-Refer to Table 4-2.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 increases from $38 to $46

• A) consumers will buy no cowboy hats.
• B) the marginal cost of producing the third cowboy hat will increase to $46.
• C) producer surplus will rise from $22 to $46.
• D) there will be a surplus of cowboy hats.

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Definitions:

Underwriter

A party who receives payments from an insured party and makes the payment to the beneficiary.

Insurer

The party who receives payments from the insured party and makes the payment to the beneficiary.

Mailbox Rule

A rule which holds that an acceptance is valid when it is placed in the mailbox, whereas a revocation is effective only when received by the offeree. In some jurisdictions the mailbox rule has been expanded to faxes.

Automobile Insurance

A type of insurance policy that provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise.