If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. What is Leo's opportunity cost of making a pound of fudge?
A. 0.8 of a pound of toffee
B. 4 pounds of toffee
C. 5 pounds of toffee
D. 1.25 pounds of toffee
Answer: D
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A) the people who become better educated get better jobs. B) better educated people commit fewer crimes. C) better educated people are less lazy. D) little pollution is created when educating people. E) better educated people are more productive.
The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach
A) expenditure; income B) expenditure; national product C) national product; income D) net national product; personal income
Innovations that lower production costs or create new products:
A. are rare in competitive industries. B. discourage new firms from entering the industry. C. often generate short-run economic profits that do not last into the long run. D. usually generate long-run economic profits for the innovator.
Tariffs are NOT defended on the grounds that they
A) improve the terms of trade of foreign nations. B) protect jobs and reduce unemployment. C) promote growth and development of young industries. D) prevent over-dependence of a country on only a few industries. E) protect domestic producers from foreign low prices.