A PPF can be used to illustrate:
(a) Producer Profit;
(b) Opportunity Cost;
(c) Market Equilibrium;
(d) None of the above.
Answer: (b) Opportunity Cost;
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If people are risk averse regarding environmental damages.
a. Low discount rates should be used b. High discount rates should be used c. Expected values will overstate ecological damages d. Irreversible actions should be taken e. They will generally approve of irreversible projects f. All of the above. g. None of the above.
Refer to the figure below. Suppose MC1 is the marginal cost of information and MB1 is the marginal benefit of information. Should a rational consumer pay $6 to get a 5th unit of information?
A. No, because at this price, the marginal cost of the 5th unit exceeds its marginal benefit. B. Yes, because at this price, the marginal benefit of the 5th unit equals its marginal cost. C. No, because at this price the marginal benefit of the 5th unit exceeds its marginal cost. D. Yes, because at this price, the marginal benefit of the 5th unit exceeds its marginal cost.
Candy Cane Corporation (CCC) produces 100,000 boxes of candy canes per year that sell for $3 a box. If variable costs are $2 per box and it has $125,000 in fixed operating costs, in the short run the CCC should:
A. reduce production until the break-even point is reached. B. shut down as fixed costs are not being covered. C. keep producing as profits are $25,000. D. keep producing because variable costs are covered.
Which function of money represents a measure for stating the prices of goods and services?
A) medium of exchange B) unit of account C) store of value D) means of payment