Refer to the accompanying figure. The opportunity cost of producing one bushel of corn is:
A. 250 bushels of wheat.
B. ½ of a bushel of wheat.
C. 500 bushels of wheat.
D. 2 bushels of wheat.
Answer: D
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When the Fed buys a U.S. bond in the open market
A) its action contracts total reserves and the money supply. B) total reserves increase by the amount of the purchase but the money supply stays the same. C) its action expands total reserves and the money supply. D) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.
Which of the following would not be a monopolistic competitor?
A. Mother's café B. Mr. Nice Guy's rent-a-tuxedo C. Andy's magic shop D. International Business Machines
If a firm is experiencing diseconomies of scale, then
A) proportional increases in all inputs result in proportional increases in output. B) the long-run average cost curve is rising as output expands. C) the long-run average cost curve is decreasing as output expands. D) the firm should expand the size of its operation.
The argument that import restrictions save jobs and promote prosperity fails to recognize that
A) import restrictions cannot create jobs in any industry. B) import restrictions cannot create jobs in any industry. C) there are no secondary effects of import restrictions. D) import restrictions will lower prices in the protected industries.