Scenario 13-8
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-8. What are Wanda's total economic costs per glass?
A)$0.18
B)$0.10
C)$0.08
D)$0.02

Question

Quizplus · Accepted Answer

Total economic cost per glass = $0.01+$0.02+$0.03+$0.02+$0.10 = $0.18 per glass

Answer: B
 
Wanda's total revenue from selling 300 glasses of lemonade is:
$0.50 x 300 = $150

Wanda's total economic cost of producing 300 glasses of lemonade is:
$0.18 x 300 = $54

Wanda's profit is:
Total revenue - Total economic cost = $150 - $54 = $96

Therefore, Wanda's best choice is to produce and sell 300 glasses of lemonade since it would result in the highest profit.

Scenario 13-8 Wanda Owns a Lemonade Stand. She Produces Lemonade Using Five