Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?
A. Starting from point A, this economy does not incur any opportunity cost in producing more wool.
B. In moving from point A to point B, the economy is experiencing economic growth.
C. Starting from point A, this economy does not incur any opportunity cost in producing more bread.
D. In moving from point A to point B, the economy produces 30 additional bales of wool at an opportunity cost of 250 loaves of bread.
Answer: D
You might also like to view...
What two factors are the keys to determining labor productivity?
A) technology and the quantity of capital per hour worked B) the growth rate of real GDP and the interest rate C) the average level of education of the workforce and the price level D) the business cycle and the growth rate of real GDP
Assume that a consumer purchases a combination of products X and Y and MUx / Px = 75 utils per dollar and MUy / Py = 50 utils per dollar. To maximize utility without spending more dollars, the consumer should buy:
a. more of both X and Y. b. less of Y only if the price of Y increases. c. more of Y and less of X. d. more of X and less of Y. e. less of both X and Y.
A welder who quits his job and moves from Houston to Buffalo to try to get a better welding job is said to be:
a. frictionally unemployed. b. underemployed c. cyclically unemployed. d. structurally unemployed.
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 If Island Bikes charges a single price to all of its customers, then how many bikes will it rent out each day?
A. 5 B. 4 C. 3 D. 6