An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Ricardo to produce one computer?
A. 4 shirts
B. ½ shirt
C. 2 shirts
D. ¼ shirt
Answer: C
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Because new plastic and recycled plastic are substitutes, as the price of newly produced plastic decreases
A) the demand curve for recycled plastic shifts to the left. B) there is a movement up along the demand curve for recycled plastic. C) there is a movement down along the demand curve for recycled plastic. D) the demand curve for recycled plastic shifts to the right.
During World War II, price supports for agriculture:
a. were not generally needed because of high demand. b. were considered by Congress but never enacted. c. were rescinded in order to encourage reductions in output. d. led to decreases in the supply of many products.
According to classical economists, inflation occurs when the annual rate of growth in the money supply
a. exceeds the annual rate of growth of full-employment real GDP b. equals the annual rate of growth of full-employment real GDP c. exceeds the annual rate of growth of money velocity d. is less than the annual rate of growth of money velocity e. is less than the annual rate of growth of full-employment nominal GDP
Which of the following is NOT an assumption of the classical model?
A. Households want to maximize economic well being. B. Wages and prices will move freely in the upward direction but not the downward direction. C. Buyers and sellers react to changes in relative prices. D. No single buyer or seller of a commodity can affect its price.