Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. The opportunity cost of producing a unit of Y is
A) 1 unit of X per unit of Y for Agnes and 2 units of X per unit of Y for Brenda.
B) 1 unit of X per unit of Y for Agnes and 1/2 unit of X per unit of Y for Brenda.
C) 1 hour for Agnes and 1/2 hour for Brenda.
D) 1 hour for Agnes and 2 hours for Brenda.
B
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If Bertrand price competitors incur recurring fixed costs, it will still be a Nash equilibrium for price to equal marginal cost.
Answer the following statement true (T) or false (F)
Suppose a friend gives you two pieces of gum, and you decide to have one piece now and save the other for tomorrow. You do this because:
a. the total utility you get from the two pieces of gum will be higher tomorrow. b. the marginal utility you get from the second piece will be higher tomorrow. c. the marginal utility you get from the second piece will be higher today. d. the marginal utility you get from the first piece will be less today. e. the total utility you get from the two pieces will be less tomorrow.
Efficiency is related to the size of the economic pie, whereas equality is related to how the pie gets sliced and distributed
a. True b. False Indicate whether the statement is true or false
In the example of the peg between Britain and Germany, what would have been the case if Britain had adhered to the pegged exchange rate?
A) It would not have had the option of raising its own rate. B) It would have been able to inflate its currency to keep output stable. C) It would not have been able to inflate its currency to keep output stable. D) It would have had to raise taxes and balance its budget.