Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.Table 1.1Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)S0NA10 T1 9 U2 7 V3 4NAThe lowest opportunity cost e in Table 1.1 for B-1 bombers in terms of Stealth bombers is
A. 0.5 Stealth bomber per B-1 bomber.
B. 0 Stealth bombers per B-1 bomber.
C. 2 Stealth bombers per B-1 bomber.
D. 1 Stealth bomber per B-1 bomber.
Answer: D
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A) the demand was more elastic. B) the demand was more inelastic. C) the supply was more elastic. D) Both answers A and C are correct.
Which of the following is ALWAYS true regarding a profit maximizing monopolistically competitive firm in short-run equilibrium?
A) P = ATC. B) P = MR. C) MR = MC. D) MC = ATC.
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a. In the short run, unemployment will increase and inflation will fall. b. In the short run, unemployment will increase and inflation will rise. c. In the short run, unemployment will decrease and inflation will rise. d. In the short run, unemployment will decrease and inflation will fall.
The decision by firms of the quantity of each input to demand is based on
A. the price of inputs. B. the price of output. C. techniques of production available. D. government oversight.