Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one snowboard is painting
A) 1.5 kites. B) 3 kites. C) 4 kites. D) 12 kites.
C
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Answer the following statement(s) true (T) or false (F)
1. In a model that analyzes the effects of a tax change, the tax serves as an endogenous variable. 2. The embarrassment theory suggests why shopping carts should be smaller. 3. An economic model, even if unrealistic, is useful as long as it makes predictions that are realistic. 4. Efficiency is the only criterion by which economists judge policies. 5. All points on a risk-neutral individual's indifference curve have the same expected value.
A negative externality is
A) a cost realized by the producer of a good or service. B) anything that is external or not relevant to the production of a good or service. C) a cost paid for by the consumer of a good or service. D) a by-product of an activity that hurts someone who is not involved in that activity.
If the above figure accurately portrays the market conditions for a given monopolist, we can be assured that the monopolist
A) is making a normal profit. B) is producing at the level that will maximize benefit to society. C) is making excessive profits. D) will be forced to go out of business in the long run.
Explain how a decrease in the interest rate will affect autonomous investment