Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup in each flake.The machine that injects the syrup into the flakes has no alternative uses.Which of the following is true?
A)All of the machine's earnings are economic rent.
B)All of the machine's earnings are opportunity cost.
C)The supply curve for this machine is horizontal.
D)The demand curve for this machine is horizontal.
E)The demand curve for this machine is vertical.

Question

Quizplus · Accepted Answer

Since the machine has no alternative uses, its earnings are economic rent, which means it is earning more than its opportunity cost. Therefore, option A is the correct answer. Options B, C, D, and E do not accurately describe the situation.

Gooey Flakes Is the Only Ready-To-Eat Cereal That Has Chocolate