John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario
A) the opportunity cost of decorating a wedding cake for Mary is 4 ice-cream cakes.
B) the opportunity cost of decorating a wedding cake for Mary is 1/4 ice-cream cake.
C) the opportunity cost of decorating a wedding cake for Mary is 2 1/2 ice-cream cakes.
D) the opportunity cost of decorating a wedding cake for Mary is 2/5 ice-cream cake.
A
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If a new method for obtaining oil from dry oil fields is found, then we will see:
a. the AS curve shift to the left. b. a movement to the left along the AD curve. c. the AD curve shift to the left. d. the AD curve shift to the right. e. the AS curve shift to the right.
Answer the following statement(s) true (T) or false (F)
1. Bonds are considered riskier than stocks. 2. Preferred stockholders are paid before bondholders. 3. Common stock dividends do not vary based on profit. 4. Stockholders are the people who own corporations. 5. It is very difficult for an individual to own stock in a corporation.
You work as a forecaster for a luxury automobile manufacturer. You know that there is a strong positive relationship between the demand for luxury automobiles and income levels. The government issues a report predicting that it expects income levels to increase steadily over the next 5 years. All else equal, which of the following courses of action would you recommend to the firm?
A. Don't change the amount of investment made, but raise the price of luxury automobiles in response to the expected increase in the demand. B. Start to increase investment now so that when income levels increases and the demand for luxury automobiles increases, the firm will be able to meet the new demand. C. Suggest that the firm curtail its advertising to avert a substantial increase in demand for luxury automobiles. D. Suggest that the firm make an investment in new capital to produce luxury automobiles only after it can verify an increase in income levels.
Reserve requirements are set by
A) the Secretary of Treasury. B) the President. C) Congress. D) the Fed.