Henry can make a bird house in 3 hours and he can make a bird feeder in 1 hour. The opportunity cost to Henry of making a bird house is 1/3 bird feeder
a. True
b. False
Indicate whether the statement is true or false
False
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What are the distinctions between domestic and national, and gross and net?
What will be an ideal response?
One implication of the fact that profit functions are convex in prices is that firms will always prefer:
a. stable input and output prices. b. input and output prices that fluctuate about a given level. c. stable input prices and fluctuating output prices. d. fluctuating input prices and stable output prices.
If expected inflation is constant and the nominal interest rate increased 3 percentage points, the real interest rate would
a. increase 3 percentage points. b. increase, but by less than 3 percentage points. c. decrease, but by less than 3 percentage points. d. decrease by 3 percentage points.
If fair insurance is offered to a risk-averse person, she will
A) buy enough insurance to eliminate all risk. B) not buy any insurance because it is overpriced. C) not buy any insurance since the marginal utility of the amount of the payment is positive. D) buy enough insurance to cover about half of the possible loss.