Refer to Figure 1.7. The cost of producing at point G rather than point D is
A. AB units of food.
B. OA units of food.
C. KL units of clothing.
D. OL units of clothing.
Answer: A
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Why do firms engage in price discrimination?
A) to decrease cost B) to increase profits C) to increase consumer surplus D) to prohibit the resale of their products
Economic fluctuations are defined as
a. alternating periods of significant GDP growth and decline. b. events only encountered in developing countries. c. periods of stable economic growth. d. alternating periods of unemployment falling above and below zero.
If planned investment is ________ to changes in the interest rate, the planned investment schedule is vertical.
A. perfectly responsive B. negatively related C. positively related D. perfectly unresponsive
With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 6%. But if the rate of inflation was anticipated to be 4%, the bank would most likely charge the firm an annual interest rate of:
A. 2 percent B. 4 percent C. 6 percent D. 10 percent