Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?
A) 5 pies
B) 10 pies
C) 15 pies
D) 20 pies
Answer: A
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The rule for the optimal use of any input says that
A. when MRP is less than price, it pays to expand resource use. B. when MRP is greater than price, it pays to expand resource use. C. when MRP equals price, resource use should be cut back. D. resources should be used only if MRP exceeds price.
Computers and software programs are
a. inferior goods b. complementary goods c. goods with a cross-price elasticity of demand of 0 d. substitute goods e. perfectly elastic goods
The view that decision-maker expectations are based on actual outcomes observed during the recent past is called the
a. rational expectations hypothesis. b. adaptive expectations hypothesis. c. permanent income theory. d. recognition lag.
The long-run equilibrium condition for perfect competition is:
A. P = AVC = MR = MC. B. P = ATC = MR = MC. C. Q = AVC = MR = MC. D. Q = ATC = MR = MC.