Table 1.1 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 1.1 Production Possibilities for Bombers Combination Number of B-1 Bombers Opportunity cost (Foregone Stealth) Number of Stealth Bombers Opportunity cost (Foregone B-1) S0NA10 T1 9 U2 7 V3 4NAThe highest opportunity cost in Table 1.1 for B-1 bombers in terms of Stealth bombers is
A. 0.5 Stealth bomber per B-1 bomber.
B. 2 Stealth bombers per B-1 bomber.
C. 1 Stealth bomber per B-1 bomber.
D. 3 Stealth bombers per B-1 bomber.
Answer: D
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Refer to Table 2-9. What is Thailand's opportunity cost of producing one wristwatch?
A) 0.05 pounds of rice B) 20 pounds of rice C) 25 pounds of rice D) 60 pounds of rice
If the social marginal cost of a good is very high relative to the private marginal cost, then a monopoly will most likely
A) produce more than the social optimum. B) produce less than the social optimum. C) produce the social optimum. D) produce zero pollution.
Suppose the refrigerator repairman charges you for two hours of labor even though he could have fixed it in ten minutes. This is an example of
a. natural selection b. moral hazard c. hidden actions d. external costs e. hidden characteristics
Recall the illustration in the text where Y = $700 billion, consumers spend $620 billion on consumption goods, and producers make only $600 billion of consumption goods. David Tietlebaum's Poster and Frame store, a representative retail store, is directly affected by this situation. Which of the following does not happen to David?
a. David discovers that the inventories he wants to hold will be reduced. b. David will reorder greater quantities of posters and frames. c. David will sell some of the goods he had expected to hold as investment. d. David will need to restock depleted inventories. e. David will find that his actual investment is greater than intended investment.