Assume a society can produce either olives or grapes. If the marginal rate of transformation of bushels of olives into bushels of grapes is 0.2, then the opportunity cost of grapes is
A. the 5 bushels of grapes that must be forgone.
B. the 0.2 bushels of olives that must be forgone.
C. the additional 0.2 gallons of olives that can be produced.
D. the 5 bushels of olives that must be forgone.
Answer: B
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Gelato ice cream maker shows the following on its balance sheet: revenue $200M, wages $100M, milk expenses $50M, strawberry purchases $5M, and taxes $25M. What is Gelato's contribution to GDP using the income approach?
A) $100M B) $125M C) $145M D) $200M
The marginal tax rate is equal to the
A) total amount of a person's tax payment divided by the total amount of the person's taxable income. B) total amount of a person's tax payment divided by the change in the person's taxable income. C) change in the person's tax payment divided by the total amount of the person's taxable income. D) change in the person's tax payment divided by the change in the person's taxable income.
If an increase in income causes a decrease in the consumption of good Y, we know that good Y is:
A. a normal good. B. a complement. C. an inferior good. D. a substitute.
Explain what is meant by the term opportunity cost
What will be an ideal response?