Suppose that the country of Utopia produces only steel and coffee. In 1998, Utopia produced 900 tons of steel and 500 pounds of coffee, while in 1999, it produced 1,000 tons of steel and 550 pounds of coffee. Assume that no technological changes occurred in the production of either good and the resource endowment of Utopia did not change. Which of the following is true?
a. Utopia's opportunity cost of producing additional steel is 50 pounds of coffee.
b. Utopia's production must have been productively inefficient in 1998.
c. Utopia's opportunity cost of producing additional steel is 1/2 pound of coffee per ton of steel.
d. Utopia's opportunity cost of producing additional coffee is 100 tons of steel.
e. The production point in 1998 was unattainable given then-current resources and technology.
B
You might also like to view...
If a nation during its entire history has borrowed more from the rest of the world than it has lent to the rest of the world, the country is a
A) net borrower. B) debtor nation. C) net lender. D) creditor nation.
The Japanese system of universal health insurance requires no co-payments from residents for health services
Indicate whether the statement is true or false
Suppose the upward sloping labor supply curve shifts leftward in a labor market with a single employer (monopsony). What happens to the marginal expenditure curve?
A) Shifts left B) Shifts right C) Remains the same D) We do not have enough information to answer this question.
A proponent of supply-side economics would advocate
A. increasing income taxes on saving. B. reducing corporate income tax. C. increasing capital gains tax. D. increasing personal income tax.