Figure 2-7 Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?
a. 20 engines
b. 20 engines and 15 tvs
c. 15 tvs
d. zero
Answer: a. 20 engines
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In the market for jeans, which of the following events increases the de-mand for a pair of jeans?
A. The wage rate paid to garment workers rises. B. The price of a denim skirt (a substitute for jeans) rises. C. The price of denim cloth falls. D. New technology reduces the time it takes to make a pair of jeans.
Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses?
A) 2.5 silk leaves B) 10 silk leaves C) 25 silk leaves D) 55 silk leaves
Protection of a new industry until it becomes strong enough to compete is called
A) the national defense argument. B) the government indirect tax argument. C) the leveling-the-playing-field argument. D) the infant-industry argument.
An improvement in production technology will
a. increase a firm's costs and increase its supply. b. increase a firm's costs and decrease its supply. c. decrease a firm's costs and increase its supply. d. decrease a firm's costs and decrease its supply.