A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:Production Possibilities ScheduleProductABCDEFSteel012345Wheat100907555300In moving stepwise from possibility A to B to C … to F, the opportunity cost of a unit of steel in terms of wheat
A. increases at first then decreases.
B. decreases.
C. remains constant.
D. increases.
Answer: D
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Given a nominal interest rate of 6 percent, in which of the following cases would you earn the highest after-tax real rate of interest?
a. Inflation is 3 percent; the tax rate is 25 percent. b. Inflation is 1 percent; the tax rate is 50 percent. c. Inflation is 1 percent; the tax rate is 55 percent. d. Inflation is 4 percent; the tax rate is 10 percent.
If marginal utility is declining but still positive, total utility is increasing.
Answer the following statement true (T) or false (F)
Which of the following is an example of unconventional monetary policy?
A. The Federal Reserve selling T-bills B. The Federal Reserve decreasing the discount rate C. The Federal Reserve purchasing mortgage-backed securities D. None of the above is correct.
Given that autonomous consumption equals $1,000, disposable income equals $20,000, and the MPC equals 0.80, the level of
A. Saving equals $4,000. B. Saving equals $19,000. C. Consumption equals $16,000. D. Consumption equals $17,000.