Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.Table 1.1Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)S0NA10 T1 9 U2 7 V3 4NAThe highest opportunity cost anywhere in Table 1.1 for Stealth bombers in terms of B-1 bombers is
A. 1 B bombers
B. 0.5 B bombers
C. 3 B bombers
D. 2 B bombers
Answer: A
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The slope of a demand curve is not used to measure the price elasticity of demand because
A) the slope of a linear demand curve is not constant. B) the measurement of slope is sensitive to the units chosen for price and quantity. C) the slope of a line cannot have a negative value. D) the slope of the demand curve does not tell us how much quantity changes as price changes.
Which of the following is true?
a. To reduce cannibalization among products, reposition a product so that it does not directly compete with the other b. After acquiring a substitute product, raise prices on both the products c. After acquiring a complementary product, lower prices on both the products d. All of the above
There are two kinds of changes in net taxes: First, net taxes can change if the government changes its tax or transfer policies. Second, net taxes change automatically as income rises and falls, without any change in policy. The _________ kind of change sets off the multiplier process, while the _________ kind of change occurs during the multiplier process
a. first; first. b. first; second. c. second; first. d. second; second. e. None of the above.
The process of entry and exit into a monopolistically competitive market causes:
A. the firm's demand curve to shift left and/or right. B. the firm's marginal cost curve to shift straight up and/or down. C. the firm's supply curve to shift left and/or right. D. the firm's average total cost curve to shift left and/or right.