Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas.
B) 1/2 pizza.
C) 5 pizzas.
D) 1 pizza.
B
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If the demand for a good is extremely inelastic, a large increase in the cost of supplying it will
A) raise its price substantially and increase the total dollars spent to purchase it. B) raise its price substantially but decrease the total dollars spent to purchase it. C) raise its price very little and decrease the total dollars spent to purchase it. D) raise its price very little but increase the total dollars spent to purchase it.
The price elasticity of demand for movies is approximately 1 and 500,000 tickets are sold per day. If the average price of a movie ticket increases by 20 percent, the number of tickets sold each day decreases to ________
A) 400,000 B) 300,000 C) 420,000 D) 475,000
If real disposable income fell during a particular year, we can conclude that:
A. personal taxes increased. B. inflation occurred. C. transfer payments declined. D. none of these necessarily occurred.
Microeconomics is best described as the study of
A. how markets interact in the aggregate economy. B. marginal changes in the economy. C. the choices made by individual households, firms, and governments. D. inflation, unemployment, gross national product, and the nation's economy as a whole.