American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. for the US, what is the opportunity cost of a car?
a. 2.5 tons of grain
b. 0.4 tons of grain
c. 10 tons of grain
d. 5 tons of grain
Answer: c. 10 tons of grain
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Which of the following explains why the marginal cost curve has a U shape?
A) Initially, the average cost of production rises, then falls. B) Initially, the marginal product of labor falls, then rises. C) Initially, the marginal product of labor rises, then falls. D) Initially, the average product of labor rises, then falls.
People who are risk averse
A) value a collection of assets only on the basis of its expected returns. B) value a collection of assets only on the basis of the risk of that return. C) value a collection of assets not only on the basis of its expected returns but also on the basis of the risk of that return. D) are less likely to invest in life insurance. E) are less likely to have a diverse portfolio.
Suppose that your demand schedule for jeans is shown in the table below.
A) Your total utility from 5 pairs of jeans would be _____.
B) Your marginal utility for the fifth pair would be _____.
C) If the price of jeans were $10 a pair, your consumer surplus would be _____.
If a profit-maximizing firm in a perfectly competitive market is currently producing the output where (price - average variable cost) = average fixed cost, the firm is:
A. making a positive economic profit. B. making a zero economic profit. C. suffering an economic loss. D. None of these