Refer to the accompanying figure. Moving from point B to point A, the opportunity cost of 25 more salads is:
A. 5 pizzas.
B. 20 pizzas.
C. 10 pizzas.
D. 15 pizzas.
Answer: C
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Joe consumes pizza and movies. He is currently spending his entire income and his marginal utility of pizza is 15 and his marginal utility of movies is 10
If the price of a pizza is $10 and the price of a movie is $5, then to maximize his utility Joe should A) increase consumption of pizza and decrease consumption of movies. B) increase consumption of movies and decrease consumption of pizza. C) not change his current bundle of movies and pizza. D) increase consumption of both goods.
Why are laws aimed at regulating monopolies called "antitrust" laws?
A) "Trust" was a word in Old English that meant monopoly in the Middle Ages. Therefore, "antitrust" is a term that means "against monopoly." B) In the late 1800s, firms in several industries formed trusts; they were called "trusts" because when corporate officials were questioned about their business they would clam that business was good for the country and that they should trusted. C) The rise of large firms (e.g., Standard Oil) in the late 1800s in the United States caused consumers to lose trust in private business. D) In the late 1800s, firms in several industries formed trusts; the firms were independent but gave voting control to a board of trustees. Antitrust laws were passed to regulate these trusts.
Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not
a. operate where price equals marginal cost b. charge a higher price than firms in perfect competition c. produce a smaller quantity than firms in perfect competition d. produce where price equals average total cost e. exit when demand falls below long-run average costs
When the economy enters a prosperity phase, personal income tax collections
a. fall along with consumption and real GDP b. rise along with real GDP but unemployment insurance payments to workers fall c. rise but real GDP and unemployment insurance payments to workers fall d. fall along with real GDP but unemployment insurance payments to workers rise e. fall causing real incomes and employment to fall