Rex Carr Could Pay $10 for a Shovel That Lasts

question 11

Multiple Choice

Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and that smashes cars at a marginal cost of $1 per car.If it is also possible for Rex to buy a high-quality hydraulic car smasher that cost $550 per year to own and if with this smasher he could dispose of cars at a cost of $.75 per car, it would be worthwhile for him to buy this high-quality smasher if he planned to dispose of

• A)at least 1,410 cars per year.
• B)no more than 700 cars per year.
• C)no more than 1,400 cars per year.
• D)at least 1,400 cars per year.
• E)at least 700 cars per year.

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Definitions:

Optimal Choice

The best possible decision or selection made from a set of alternatives, given the constraints and objectives at hand.

Hot Dog Buns

Baked goods specifically designed to hold and serve hot dogs.

Budget Line

A depiction in graphic form of every achievable combination of two commodities that can be acquired based on a specified financial capacity and pricing.

Indifference Curve

An economic graph representing combinations of goods that give a consumer equal satisfaction and utility.