Ellie and Brendan both produce apple pies and vanilla ice cream. If Ellie's opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan's opportunity cost of one apple pie is 1/4 gallon of ice cream, a mutually advantageous trade can be struck at a price of one apple pie for 1/3 gallon of ice cream
a. True
b. False
Indicate whether the statement is true or false
True
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Information advertising might provide information about prices in stores, or it might provide information about product characteristics that consumers might not know about. Which one do you think is more likely to be efficient?
What will be an ideal response?
Which of the following is true if the production of a good gives rise to a positive externality?
A) The marginal social benefit from each level of output exceeds the consumers' willingness to pay. B) The marginal private benefit from production exceeds the marginal social benefit. C) The demand curve for the good shifts to the left in the presence of positive externalities. D) The demand curve for the good shifts to the right in the presence of positive externalities.
What is the major advantage of the corporate form of business organization?
A) Its owners have limited liability. B) Its owners have unlimited liability. C) Its profits are not taxed. D) Its profits are taxed twice.
The figure above shows a perfectly competitive firm. When the firm maximizes its profit, its economic profit
A) is more than $300. B) is $300. C) is less than $300. D) The premise of the question is wrong because the firm is incurring an economic loss.