A Company Can Rent One of Two Copying Machines

question 16

Multiple Choice

A company can rent one of two copying machines.The first costs $34 a month to rent and costs an additional 2 cents per copy to use.The second costs $107 a month to rent and an additional 1 cent per copy to use.How many copies would the company need to make per month in order for it to be worthwhile to rent the second machine?

• A)7,300
• B)13,300
• C)12,400
• D)6,900
• E)None of the above.

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Definitions:

Widgets

A hypothetical or generic product often used in economic examples and problems to represent any type of good or service.

Externalities

Costs or benefits arising from an economic activity that affect bystanders and are not reflected in market prices.

Distortionary Taxes

Taxes that cause changes in behavior and decision-making, leading to inefficiencies in the market.

Nonneutral Taxes

Taxes that disproportionately affect one group or type of economic activity over another, often used to influence market outcomes.