Question

Thirsty Thelma owns and operates a small lemonade stand. When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized. Because she can easily put her idle resources to use,
a. the marginal cost of an extra worker is large.
b. the marginal cost of one more glass of lemonade is smaller than if output were high.
c. her lemonade stand is likely to be crowded with workers.
d. the marginal product of an extra worker is small.

Answer 1

Answer:

b. the marginal cost of one more glass of lemonade is smaller than if output were high.

Explanation:

Since the Thirsty Thelma operates in small lemonade stand and when she produced a low quantity of lemonade she has fewer workers plus her equipment is also not fully utilized

So she put her idle resources to use for one more glass of lemonade as if its output is high

Hence, the second option is correct