Table 1.2 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 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20NA195 B35 180 C45 150 D50 100NAOn the basis of Table 1.2, what is gained by producing at point B rather than point A?
A. 15 Stealth bombers.
B. 15 B-1 bombers.
C. 195 Stealth bombers.
D. 35 B-1 bombers.
Answer: B
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What will be an ideal response?
The social discount rate is an important component in net present value (NPV) calculations for public policies related to stock externalities, but economists do not agree on which value to use for this rate
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