If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is
What will be an ideal response?
greater than 5Y.
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Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). If a social planner dictates that five compact discs be produced and distributed to John, Robert, and Jimmy, then even if the compact discs are allocated based on demand, this market will lose out on $___ of value.
a. $5. b. $10. c. $15. d. There will be no lost value as five compact discs is the efficient level..
The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the
A) marginal revenue product (MRP) of labor. B) total factor cost (TFC) per worker. C) general rule for hiring. D) marginal physical product (MPP) of labor.
A pottery craftsman is debating attending the crafters fair. It costs $50 to set up the booth and $20 in transportation to get his pottery to the fair. He nets $5 for each of his pieces, number of pots he must sell to make going to the fair worth the cost?
a. 10 b. 12 c. 14 d. 16
A nation's comparative advantage is determined by
A. the total cost of production. B. the quantity of resources required to produce a unit of output. C. the opportunity cost of producing an item relative to a trading partner's opportunity cost of producing the same item. D. specialization in the production of all goods.