Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?
A) 3/8 of a ton of coconuts B) 2/3 of a ton of coconuts
C) 1 1/2 tons of coconuts D) 100 tons of coconuts
C
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Answer the following statements true (T) or false (F)
1. As more firms enter a monopolistic competitive industry, average revenue will fall for existing firms. 2. In an oligopoly, the pricing policy of each firm is independent of that of other firms. 3. A kinked demand curve results when one firm’s price changes are followed downward but not upward by competing firms. 4. In the long run, economic profits tend to be eliminated under conditions of monopolistic competition. 5. Predatory pricing involves charging different customers different prices for the same good.
Which of the following statements is true regarding the difference between a monopolist and a perfectly competitive firm?
a. Competitive price is higher than the price charged by a monopolist. b. Supply of output is higher in case of a monopoly than if the market is competitive. c. A monopoly can choose its price while a competitive firm is a price taker. d. A market characterized by competition has a higher deadweight loss.
Which of the following is characteristic of a monopolistic competitor?
a. a standardized product b. the ability to influence price c. allocative efficiency d. a horizontal firm demand curve
Demand deposits are a type of
a. checking account. b. time deposit. c. money market mutual fund. d. savings deposit.