The figure above shows the production possibilities frontier for a country. In order for it to move from producing at point A to producing at point B, the country would need to incur an opportunity cost of
A) 4 million SUVs.
B) 3 million SUVs.
C) 1 million SUVs.
D) 3 million compact cars.
E) 0 because the gain in compact cars exceeds the loss in SUVs.
C
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Shoe-leather costs arise from inflation because the velocity of circulation of money ________ as the inflation rate ________
A) decreases; rises B) increases; rises C) does not change; rises D) increases; falls E) does not change; falls
If 2009 is the reference base period, what is the price index for the CPI basket of goods for 2015 in the above table?
A) 97.3 B) 102.8 C) 128.0 D) zero because the price of Blu-rays fell and the price of water increased
A good that has social costs that are less than private costs has a quantity that is
A) too high. B) too low. C) just right. D) equal to zero.
Which of the following is an example of an implicit cost a firm might incur?
A) the wages paid to employees B) the payment for medical insurance coverage C) the opportunity cost to investors of the funds invested in the firm D) utility payments