While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range) is
A) 1/2.
B) 1/4.
C) 2.
D) 4.
E) An amount that cannot be calculated without more information.
C
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An economy recovering from a recession
A) moves up from its trough to a period of expansion. B) moves up from its peak to a period of expansion. C) moves down from its trough to a period of depression. D) moves down from its peak to a period of expansion.
Firms in a small economy anticipated that inventories would grow over the past year by $500,000. Over that year, inventories actually grew by only $400,000. This implies that
A) there was a planned increase in inventories that year. B) aggregate expenditure that year was greater than GDP that year. C) aggregate expenditure that year was equal to GDP that year. D) there was an unplanned increase in inventories that year.
Everything else held constant, in the market for reserves, decreases in the interest rate paid on excess reserves affect the federal funds rate
A) when the funds rate is below the interest rate paid on excess reserves. B) when the funds rate equals the interest rate paid on excess reserves. C) when the funds rate is below the discount rate. D) when the funds rate equals the discount rate.
When the government implements an agricultural price support (above the equilibrium price), a surplus results and the government buys the surplus at the support price
Indicate whether the statement is true or false