Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is
A) 1 unit of Y.
B) 2 units of Y.
C) 1/2 unit of Y.
D) 1/4 unit of Y.
E) none of the above
A
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The basic problem with the existence of dead capital is that
A. since there is no cost to dead capital, there is an incentive to overinvest. B. dead capital cannot be put to any use since there is no ownership. C. with no clear ownership, dead capital often cannot be transferred to its most efficient use. D. dead capital creates government inefficiency, bureaucracy, and excessive regulation.
In the long run in a perfectly competitive industry
A) opportunity costs are negligible. B) economic profits will be zero. C) some firms will be experiencing economic losses. D) only entrepreneurs will earn more than their opportunity costs.
Mrs. Smith operates a business in a competitive market. The current market price is $8.50 . At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25 . Mrs. Smith should
a. shut down her business in the short run but continue to operate in the long run. b. continue to operate in the short run but shut down in the long run. c. continue to operate in both the short run and long run. d. shut down in both the short run and long run.
Suppose the law of diminishing marginal utility holds for coffee. As a person drinks more coffee during the day, the total utility he or she receives will:
A. increase faster and faster. B. fall steadily. C. remain constant. D. rise, but at slower and slower rates.