Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs.
B. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs.
C. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs.
D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.
Answer: B
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Disinflation is
A. a constant price level. B. negative inflation. C. a drop in the average level of prices. D. a reduction in the annual rate of inflation.
In the short run, the aggregate supply curve reacts to:
A. wage warfare. B. cartels. C. price ceilings. D. price changes.
In considering the relationships between price and quantity demanded, ceteris paribus directs the economist to assume that:
A. price increases affect quantity. B. quantity increases affect prices. C. neither price nor quantity affect demand. D. all other variables remain unchanged.
Why do you never see firms in a perfectly competitive market advertise their product?
What will be an ideal response?