In the above figure, the opportunity cost of moving from point A to point C is
A) 50 guitars.
B) 0 guitars.
C) 25 guitars.
D) 50 ukuleles.
C
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The provision of a legal system is an important economic function of the government because
A) lawyers and judges tend to be high-income people. B) people need to feel safe when they go to work. C) the legal system affects how exchange takes place through its enforcement of contracts. D) the legal system affects the distribution of income through its awarding of damages in accident claims.
If firms in a competitive price-searcher market are incurring economic losses, which of the following scenarios would best describe the change existing firms (who are able to stay in the market) would face as the market adjusts to long-run equilibrium?
a. An increase in demand for each firm and lower prices. b. A decrease in demand for each firm and lower prices. c. An increase in demand for each firm and higher prices. d. A decrease in demand for each firm and higher prices.
Suppose maple syrup is illegal in the country of Pancake. If there are two ways to smuggle maple syrup into Pancake: one through overland and one by sea. If the proud Pancakian coast guard is able to arrest all who attempt to smuggle syrup by sea, what would the theory of rent predict?
A. The production costs of smuggling syrup by sea will fall to zero as the use of the sea route falls to zero. B. The increased rents to maple syrup will reduce demand for maple syrup. C. Rents for using the land route will increase, making syrup smugglers on net better off. D. Rents for using the land route will increase, but syrup smugglers on net will likely not be better off.
Assume that steel is used to produce monkey wrenches. Ceteris paribus, if the price of steel rises, then
A. There will be a leftward movement along the initial supply curve for monkey wrenches. B. The supply curve for monkey wrenches will shift to the right. C. The supply curve for monkey wrenches will shift to the left. D. There will be a rightward movement along the initial supply curve for monkey wrenches.