The table below represents five points on the production possibility frontier for the small country of Bistro, which produces only crackers (measured in thousands of boxes) and cheese (measured in thousands of pounds): A B C D E Crackers 40 30
20 10 0 Cheese 0 5 10 15 20 Does the production possibility frontier demonstrate the law of increasing opportunity cost? How can you tell?
No. The opportunity cost of increasing the production of cheese remains the same as more cheese is produced. The opportunity cost of the first 5,000 pounds of cheese is 10,000 boxes of crackers, and the opportunity cost of the fourth 5,000 pounds of cheese is also 10,000 boxes of crackers.
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Real interest rates are the
A) interest rates quoted in the market. B) interest rates quoted in the market plus the expected inflation rate. C) nominal interest rates plus the inflation rate. D) interest rates quoted in the market minus the inflation rate.
Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because, given fewer opportunities to take on risk, risk-prone entrepreneurs will be discouraged from entering the banking industry
A) moral hazard B) adverse selection C) ex post shirking D) post-contractual opportunism
In Figure 33.4, what is the burden of the tax on workers?
A. The wage reduction from W3 to W2. B. The wage reduction from W3 to W1. C. The wage reduction from W5 to W2. D. The wage reduction from W5 to W3.
The original sales price the Rooney family paid for the Pittsburgh Steelers was
A. $2,500. B. $2.5 billion. C. $25 million. D. $2.5 million.