A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:
Refer to the above table. In moving from combination E to F, the opportunity cost of an additional unit of steel is:
A. 5 units of steel
B. 0 unit of wheat
C. 1 unit of steel
D. 30 units of wheat
Answer: D
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a. True b. False Indicate whether the statement is true or false
A 4 percent reduction in the price of a product causes consumer expenditure to remain the same. The price elasticity of demand is:
A. greater than zero but less than 1. B. equal to 1. C. greater than zero. D. zero.
In the following production function, Y = f(K, NA), suppose A increases by 20%. This 20% increase in A implies that
A) the same output can be produced with 20% less labor. B) the effective quantity of labor has increased by 20%. C) output will increase by less than 20%. D) all of the above E) both A and C.
Which of the following events will increase long-run aggregate supply?
A) an increase in the interest rate B) an increase in resource prices C) a decrease in expected profit D) an advance in technology